MakerDAO has proposed an increase of the Dai savings rate (DSR) to 3.33%, a few months after a vote to raise the DSR to 1% from 0.6% saw over $35 million worth of the stablecoin deposited within a month. If approved, the latest proposal would see the DAI savings rate increase from the current rate to 3.33%.
The DSR is a fundamental component of the Maker Protocol system allowing users to deposit DAI and receive a consistent interest rate. This interest is accrued in real-time, accumulating from the system’s revenues.
As interest rates are rising in the traditional financial system, the proposal to increase the DSR could have broader implications for the wider DeFi market. Primoz Kordez, the founder of Block Analitica, said raising Dai DSR to the proposed 3.33% will have ramifications across the sector as its DSR is the “benchmark for safest DeFi stablecoin yield.”
Dai rate has been low compared to other platforms such as Compound and Aave that currently offer up to 2.5% in rates for stablecoins like USDT, USDC and DAI. One expert noted that the industry should brace itself for higher rates across lending protocols, stablecoins, bridges and DeFi treasuries.