MakerDAO increases interest on DAI by up to 8%.

The DAI from MakerDAO suffers from competition of the main stablecoins dollar the market. To pull the traffic from DAIthe DAO voted a temporary increase of returns for holders from token.

MakerDAO can it turn things around and return to the forefront of the MakerDAO market? stablecoinslargely dominated by USDT and USDC? Maker and its DAO are sparing no effort, as demonstrated by the Endgame program.

The community, through a governance votehas just passed a new measure. The objective remains the same: increase demand for the token. And to achieve this, the DAO is betting on a higher yields for holders of DAI.

Sustainable growth objective for DAI

MakerDAO thus approves the introduction of a new mechanism in the improved DAI savings rate (EDSR for Enhanced DAI Savings Rate). This may temporarily result in an increase in the interest rate charged on up to 8 %.

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“We have not yet succeeded in generating sustainable growth in new demand and capital inflows. explains Maker founder Rune Christensen. The answer to this stumbling block is the yield rate.

EDSR helps solve this problem by ensuring that Dai holders who are pioneering the adoption of DSR get a fairer value from the increased returns generated by the protocol,” he continues.

Progressive rates that don’t threaten profitability

The rate applied toEDSR is determined by the amount of deposits in the DSR and the base reward rate. The provision voted by the DAO provides for a gradual decrease as usage increases.

All this does is increase the effective DSR utilization rate, and it doesn’t increase it to anything close to 100%, so it simply can’t be unsustainable from this basic fact alone,” Rune Christensen details on the forum.

“As you can see, the highest utilization rate is 65%, which means we’d still get excessive income for 35% of the entire portfolio. Let’s not forget that the ‘natural’ utilization rate should be close to 100%, so this is still excessive and unusual profitability. he explains.

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Actions that are slow to bear fruit

For Maker, there are emergency to act. Circulation of Maker stablecoin has deteriorated sharply over the past year, as its capitalization exceeded $6 billion last year compared with just over a billion today. However, this decline comes against the backdrop of a drop in the overall stablecoin market.

The decline of DAI nevertheless predates this evolution among stable tokens. For the past year, Maker has been multiplying initiatives to regain relevance in the DeFi ecosystem. In particular, the protocol has invested in traditional assets to generate returns and reward its users.

Last month, Maker revised the DSR upwards to 3.49% in a bid to make the DAI more attractive compared with its rivals, which do not pass on income to holders. The result has yet to be seen. 306 million dollars have been deposited in the DSR. That’s less than 7% of the total token offering.

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