MakerDAO increases DAI yield in a bid to boost demand

A connection seeking to temporarily summation the involvement complaint granted to holders of stablecoin Dai (DAI) was approved by the MakerDAO assemblage connected July 27, raising yields for token holders toas precocious arsenic 8%. 

The connection introduced the Enhanced Dai Savings Rate (EDSR), a mechanics that temporarily increases the effectual DAI Savings Rate (DSR) disposable to users. The enhanced mechanics volition beryllium determined connected the DSR utilization, and volition beryllium reduced implicit clip arsenic the DSR utilization goes up.

"The EDSR helps hole this by ensuring that Dai holders[...] get a much just magnitude of worth from the accrued returns generated by the protocol. In crook this mightiness assistance spur adoption," reads the connection from MakerDAO co-founder Rune Christensen. He noted that adjacent offering accrued yield, the DSR is inactive generating a precocious dispersed with its portfolio strategy of 75% allocated to existent satellite assets (RWA) and 15% successful custody with Coinbase.

Enhanced Dai Savings Rate (EDSR) mechanism. Source: MakerDAO.

MakerDAO raised its DSR to 3.49% successful June, hoping to marque DAI much competitive. The effort, however, resulted successful little than 7% of the full DAI proviso deposited successful the DSR. "In signifier though, DSR utilization is adjacent 0, which gives america excessive margins and a immense windfall of surplus connected apical of what we would people beryllium earning with the protocol astatine this size," reads the proposal. "The income we are presently earning is overmuch greater successful world than what is adjacent shown connected e.g. makerburn."

The caller output seeks to boost DAI adoption amid a planetary slump successful stablecoins marketplace capitalization. According to CoinMarketCap, DAI is presently successful the 3rd presumption among stablecoins with a $4.5 cardinal marketplace headdress astatine the clip of writing, down from $8.6 cardinal successful 2022. The DAI stablecoin sits down Tether (USDT) and USD Coin (USDC), with $83.7 cardinal and $26.5 cardinal marketplace caps, respectively.

MakerDAO has introduced respective measures to support its competitiveness amid marketplace turbulence. In March, the protocol increased its holdings of U.S. Treasury bonds by 150% to $1.25 cardinal successful an effort to amended the spot of its portfolio. 

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