MakerDAO President Says Fee Successfully Stabalized DAI
DAI stablecoin is currently being pegged to the U.S. dollar. Interestingly, it is now deemed to be in a reasonably stable position. This is according to Steven Becker, the COO and president of MakerDAO. Here is everything about it in a nutshell.
The Significance of the Stability Fee
Becker made the claims during a Q&A session on Reddit, which took place last May 2. The meeting, in particular, reportedly focused on demand and supply imbalance. Even more so, he went to discuss the stability fee and its importance.
The discussion was made possible through the help of Richard Brown, the head of community development of MakerDAO, and Vishesh Choudhry, who is from the company’s very own Foundation Risk Team.
According to the president of MakerDAO, DAI is now more than stable and that this is all thanks to the implementation of the stability fee in the community. He claims that the peg is to be considered “stable,” although it is believed to be “stable at a discount.”
Becker backed his claims by talking about the fluctuations of the stablecoin’s rate. He clarified that these fluctuations are not essentially due to the imbalance in both the supply and demand. According to him, he believed that this phenomenon is merely a reflection of the current regime the industry is experiencing.
Community Vote Results Revealed
It is worth noting that the results from last week’s community vote have been released. Apparently, they saw both 2% and 3% increase, with the latter providing to be a stronger position. As of press time, the community will be experiencing an executive vote on that 3% increase. And if is able to pass, there is a chance that the stability fee will soon obtain the 19.5% figure.
Choudhry explained that the fee is not really burdensome, which is very contrary to the popular belief. Basically, when there is a change in the stability fee, there is a shift that is experienced in thefulcrum point of bull/bear equilibrium. This, in particular, is why it is considered a critical decision.
DAI came into existence sometime in December 2017. During that time, MakerDAO deemed it to be an ERC-20 token, with a 1:1 conversion rate with the USD. Through the over-collaterization with Ether (ETH), this exchange rate has been maintained with ease. But as far as DAI is concerned in 2019, it is now said to be playing below $1. What is worse, it reportedly plummeted below $0.95 periodically.