Maker Governance approved Spark Protocol’s latest D3M Adjustments.
https://t.co/155Qng3kPe
With over 92K MKR in favor, the approval supports the raising of the Maximum Debt Ceiling from 20 million DAI to 200 million DAI. pic.twitter.com/S58O8R0Z7s
— Maker (@MakerDAO) July 27, 2023
As suggested, The Enhanced Dai Savings Rate is a system to temporarily increase the effective DSR available to users in the early bootstrapping stage when DSR utilization is low. The EDSR is determined based on the DSR and the DSR utilization rate, and represents over time as the utilization increases, until it eventually disappears when utilization gets high enough. EDSR is a one-time, one-way temporary mechanism, which means that the EDSR can only decrease over time, it cannot increase again even if DSR utilization goes down.
The EDSR ensures that DAI holders pioneering the adoption of DSR will receive more fair value from the incremental profits generated by the protocol. In turn, this could help drive adoption and possibly push other DeFi protocols to quickly integrate DSR while EDSR is live.
Uilization rate here can be understood as the proportion of DAI locked into DSR / total supply of DAI in the market. Thus, it is likely that the interest rate of 8% will be maintained until 20% of the total supply of DAI is locked into the DSR.
In addition, the founder of Rune also said that this proposal could be put to the test and if it failed, the Stability Advisory Council could immediately deploy a vote to urgently shut down the program.
MakerDAO started using more income generating assets like government bonds to back DAI and share a portion of the income with users. The protocol increased the DSR to 3.49% last month to increase the appeal of DAI but has since quickly reduced it to 3.14%.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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