Maker Vaults, the PSM, the Dai Savings Rate (DSR), SparkLend DAI Borrow Rate, and the Governance Security Module (GSM) Pause Delay are among the modifications.
Due to increased market volatility and optimistic emotion, MakerDAO, the organisation in charge of creating the MKR token, has passed a new Executive Vote to impose temporary fee changes to strengthen the protocol. As a result, the reserves for its stablecoin Dai have been reduced.
In reaction to a sharp decline in Dai supply that occurred within the last week—from $5 billion to $4.4 billion—BA Labs, a member of Maker’s Stability Advisory Council, has put forth a proposal.
Should users want to redeem some of the $1.1 billion in Real-World Assets (RWA) on the network, MakerDAO hopes to approve a stablecoin stability measure more quickly. Even though Dai has a lot of collateral, if Dai keeps selling, using RWA vehicles as collateral could cause liquidity problems. The proposal is as follows:
“The reserves allocated to RWAs and liquid stablecoin reserves are more than enough to withstand the mounting pressure brought on by the possible bullish market mood. The problem is the inherent shortage of liquidity in the exposure to stablecoins used in RWAs”.
Even though the ecosystem of Maker DAO is now stable, it feels that it is important to plan ahead for any unexpected user actions. Changes to the PSM, the Dai Savings Rate (DSR), the Maker Vaults, the SparkLend DAI Borrow Rate, and the Governance Security Module (GSM) Pause Delay are among the proposed measures.
One of the changes is the increase in stability fees from 15% to 17.25% for various collateral assets registered on the platform. Furthermore, it intends to raise the SparkLend DAI Borrow APY to 16% from the current 6.7% level. The accepted changes will take effect at 19:55 UTC on March 10, 2024, tomorrow.
Additionally, Maker DAO intends to modify PSM in a way that would reduce the 24-hour debt ceiling rise cooldown period to 12 hours. The GSM Pause Delay will be shortened from 48 hours to 16 hours, and the Dai Savings Rate will be increased to 15% in order to facilitate the quicker implementation of future changes.
There is no automated procedure for returning the payments, even if these modifications are only temporary. On the proposal’s discussion page, GFX Labs, a blockchain research and development business, acknowledged that the revisions were a positive step forward but voiced concern about their scope due to possible market disruptions and dislocations.