MakerDAO might bring down Stability Fee of Dai To 5% Depending On Voting ResultsNovember 8, 2019
On November 11, 2019, Maker will be exhibiting at the Singapore Fintech Festival 2019. Maker is also organizing various events on November 11, 2019, across different parts of the world. Events on the same date are scheduled at Fordham Law Blockchain Regulatory Symposium, Why Bay Street Should Care about Crypto, and Convergence 2019.
On November 18, 2019, the Maker Protocol is set to upgrade to the Multi-Collateral Dai (DCD). The current version is called “Sai,” and the new version will be called “Dai.”
The pace of migration is expected to be very slow. Analysts opine that borrowers who are in the second level of lending platforms might not use the migration contract. There is a fear that the liquidity for Sai will dry up following this upgrade. The Network is awaiting a series of unknowns. If the community supports the migration, there will be a lot of advantages.
The Interim Risk Team at Maker Foundation has introduced an executive voting system into the voting system. This will allow the community to vote for the 5% Dai stability fee with a new debt ceiling at 120 million Dai. Executive voting is set to continue until the numbers of votes cross the overall price in favor of the past executive vote. The current changes were discussed during the governance call on Thursday, November 7, 2019.
The MakerDAO is moving ahead with an Executive Vote to determine whether the rates which were decided in the previous governance poll will be established.
The Dai Loan ceiling might be raised to $120 million if the votes are favourable. Despite lending hefty amounts in Loan, they do not have the data of the significant demographics who are interested in them due to the decentralized nature of the services they offer.
The stability fee was 18% in the beginning; after the voting, it might be determined whether the rates should go as down as 5%. There are no standard interest rates so far. Borrowers should pay the interest rates imposed by the voters, which is decided based on voter turnout.
Steven Becker, President of Maker Foundation, stated, “MakerDAO has hit that limit, and no more [DAI] can be generated until that debt limit is increased.”
There is one significant risk associated with these loans. These loans will automatically liquidate when the price of the Ether drops below a particular point. This point varies with the loan type.
Becker further stated, in any migration process, “Like any migration, you’ll have a dual system running until some time has passed.”
For instance, even if a small-cap token like TCAT token is migrating on their process, a dual system running for some time is unavoidable.