Latest MakerDAO vote puts DAI Stablecoin’s Stability Fee at 20%

The dollar-pegged stablecoin DAI has now achieved stability though it is still trading below one dollar. Over the past three months, the Stability Fees of the coins has increased from 0.5 percent to 16.5 percent. After the vote, the MakerDAO token holders are set to increase it by 3 percent more. Head of community development Richard Brown revealed that the vote was  “a neck and neck race” between 2 and 3 percent. A secondary vote will be held soon to execute this increase into the programmatic lending system.

Steven Becker, COO of the MakerDAO Foundation, said:

“In using the Stability Fee, progress has been made. The peg is stable, just a few percentage [points] below where it needs to be.”

MakerDAO token holders have been increasing the stability fee since February to make DAI loans more expensive. This will result in the retraction of the market supply of DAI and push its price up to dollar valuation. Cyrus Younessi, risk management lead at the MakerDAO Foundation, believes that the community has taken the right decision.

Crypto analytics platform DeFi Pulse states that MakerDAO is the most popular decentralized finance (DeFi) application in the cryptocurrency space to date owning over $300 million worth of Ether.

The DAI price is being affected by the consecutive Stability Fee as said by Vishesh Choudhry of the MakerDAO Foundation Risk team. Choudhry stated: 

“What we’ve really seen is that as we’ve increased the Stability Fee over the past few weeks, the DAI price has stabilized a bit. There has been a lot going on with [ether] and with Tether so as always take everything with a grain of salt but I think that’s a positive indicator that what we’re doing actually has an impact.”