MakerDAO, which is a programmatic loan system, has just made a very surprising move. That is because the system’s token holders have decided to vote to reduce fees on all DAI loans, and it is a move that has been done for the very first time in five months.
Decreasing Stablecoin Fees
By essence, DAI refers to a dollar-pegged stablecoin and it operates directly on the Ethereum blockchain. Currently, it is being backed in value by almost nearly 2 million Ether tokens. Ever since the start of 2019, its value has declined below $1 due to the imbalances present in the market supply and demand.
In an attempt to contract the DAI supply and with an aim of boosting the trading price, token holders of MakerDAO have reportedly decided to increase fees on the system. The latter, in particular, is responsible for issuing new DAI tokens.
Dubbed as the Stability Fee, interest accumulates over time on all DAI loans taken out directly from the said system. Over the course of five months, it has seen a substantial increase (i.e. 39 fold). It came from 0.5 percent to a whopping 19.5 percent, resulting in an uproar from some early borrowers in the aforementioned system.
Given the fact that the most recent increase of around 3 percent was performed two weeks ago, DAI prices across major over-the-counter trading desks and digital currency exchanges now seem to have moved past dollar valuation trading. Interestingly, it is as high as $1.06.
Addressing High DAI Demand
The recent move simply refers the second time in MakerDAO’s history where its token holders have decided to vote for a two percent decline to the Stability Fee. As mentioned, the decision to do so is an attempt to address high DAI demand.
Voters, however, are expected to strike back again with their tokens and will be executive another decrease straight into the MakerDAO system. As far as the recent voting is concerned, the head of community development at MakerDAO named Richard Brown said that he is somewhat uncomfortable by the lack of voter turnout. He revealed that only two token holders decided to go for the two percent decrease.
Add to this that fact that there is one token holder who, according to Brown, tried to “troll” the system. The user did this by staking around 17,000 MKR in favor of trying to increase to so-called Stability Fee by at least another 4 percent.