Community members are casting their ranked-choice vote through Dec. 1 to hike the so-called DAI Savings Rate to either 1%, 0.75%, 0.5%, 0.25% or leave it unchanged from its current 0.01% rate. MakerDAO initiated the vote on Monday.
At the time of publication, all votes favored raising the rate to 1%. This may change as more voters cast their preference.
The voting is occurring as yields in decentralized finance (DeFi) have plummeted amid lower appetite for crypto lending. Meanwhile, yields in traditional markets have increased dramatically due to the Federal Reserve’s aggressive campaign to raise interest rates, which has exacerbated the capital flight from DeFi.
MakerDAO’s revenue boon
Increasing the reward is possible as Maker boosted its revenue by putting a part of its $7.7 billion in reserves to work. The strategy consists of teaming up with institutional investors such as Coinbase and allocating in multiple yield-generating investment strategies, including investing in traditional assets like government bonds.
As Maker increasingly invests in assets outside digital assets, it may offer a way to capture the rising yields in traditional markets while simultaneously mitigating capital outflows from crypto, MacPherson argued in a tweet.
“Banks are offering 4%+ in risk-free yield. We should do the same,” he wrote in a tweet.
In a forum discussion earlier this month, Derivaux said that raising the reward would also make DAI more competitive compared to rival stablecoins.
“We could expect that such a move would incentivize USDC holders to migrate to lend DAI instead,” Derivaux wrote in his proposal. “On the other hand, this would be a significant cost for MakerDAO.”
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