MakerDAO Approves Emergency Fee Hikes in Response to DAI Stability Concerns

cryptonews.com:

Facing unprecedented market volatility and a significant reduction in reserves, BA Labs has proposed an emergency rate adjustment within the MakerDAO community forum.

In an effort to address the immediate challenges posed by the current market conditions, BA Labs, a key member of the MakerDAO Stability Advisory Council, submitted a comprehensive proposal on March 9 to increase various fees related to the DAI stablecoin.

The latest Executive Vote has just been approved.

→ https://t.co/oIY1JBtLuq

As a result, the following changes will be implemented within the Maker Protocol on March 10, 2024, at 19:55 UTC.

• Stability Fees for various collateral assets, including ETH and WBTC vaults, will… pic.twitter.com/UNUejjv8iI

— Maker (@MakerDAO) March 8, 2024

“Given the current market conditions, BA-Labs is proposing protocol parameter changes as part of a predefined accelerated governance process in the language of the Atlas,” said BA Labs.

The proposal by BA Labs included a significant increase in the DAI Savings Rate (DSR) from 5% to 15%, along with targeted stability fee raises for key vault types such as ETH-A, from 6.41% to 15.25%, and WBTC-A, from 6.68% to 16.75%.

“The DSR is an additional lever MakerDAO can utilize the DSR to make holding DAI more attractive, which in turn increases DAI demand, and ultimately alleviates the downward pressure of the DAI price,” said BA Labs.

Additionally, the post suggested reducing the Governance Security Module (GSM) Delay from 48 to 16 hours and adjusting the Peg Stability Module (PSM)-USDC-A DC-IAM ttl from 24 to 12 hours, streamlining governance and enhancing DAI’s stability framework.

“The fundamentals backing DAI remain solid, and this accelerated governance proposal is crafted in order to