For the first time in five months, token holders behind the programmatic loan system MakerDAO have voted to decrease fees on all DAI loans.
DAI is a dollar-pegged stablecoin operating on the ethereum blockchain that is currently backed in value by nearly 2 million ether tokens. Since the beginning of this year, the value of DAI has fallen below $1 as a result of market supply and demand imbalances. In an effort to contract the DAI supply with the goal of raising its trading price, MakerDAO token holders have incrementally increased fees on the MakerDAO system issuing new DAI tokens.
Called the Stability Fee, interest accrues over time on all DAI loans taken out from the MakerDAO system. Over the course of five months, the Stability Fee has increased 39 fold from 0.5 percent to 19.5 percent, sparking outrage from some early borrowers in the MakerDAO system.
Since the most recent increase of 3 percent executed two weeks ago, DAI prices across major cryptocurrency exchanges and over-the-counter trading desks now looks to have pushed past dollar valuation trading as high as $1.06.
Today's vote marks the second time in MakerDAO's history where token holders have voted for a two percent decrease to the Stability Fee in order to address high DAI demand.
Tomorrow, voters will again stake their tokens to execute the decrease into the MakerDAO system in a continuous polling round where a minimum of 117,631.90 MKR tokens must be staked in support of this proposal.
Regarding today's preliminary round of voting, MakerDAO head of community development Richard Brown expressed during a governance risk call today his discomfort at the lack of voter turnout.
According to Brown, only two MakerDAO token holders voted for the 2 percent decrease collectively staking 54,000 MKR tokens.
What's more, one MakerDAO token holder appeared to "troll" the system by staking 17,000 MKR in favor of further increasing the Stability Fee by another 4 percent despite the clear overvaluation of DAI in the markets.
"We desperately need people to lock up their Maker [tokens]," insisted Brown on today's call. "It doesn't take a lot for another voter to come out and outweighs the on 17K Maker troll that was trying to raise the Stability Fee by 4 percent."
Correction: A previous version of this article suggested the continuous polling round requires a minimum of 35,000 MKR staked instead of 117,000 MKR.
Penny image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.