Maker DAO Implements Changes to Sustain Demand Amid Bull Rally
Maker Dao, the organization behind the development of the MKR token, has approved a new Executive Vote to implement changes aimed at preventing any potential demand shock resulting from the current bull rally.
Maker DAO’s Proposed Changes
On Friday, Maker DAO announced its plans to propose an accelerated approval for a stablecoin stability measure in case users decide to withdraw a portion of the $1.1 billion worth of Real-World Assets (RWA) available for redemption on the protocol.
The organization believes it is necessary to prepare for any erratic user behavior, even though there is currently no pressure or imbalance in its ecosystem. As part of their proposed measures, Maker DAO wants to make adjustments to various aspects of their system, including:
- Maker Vaults
- SparkLend DAI Borrow Rate
- PSM (Peg Stability Module)
- DSR (Dai Savings Rate)
- GSM Pause Delay (Governance Security Module Pause Delay)
The proposed adjustments include raising stability fees on different collateral assets registered on the platform from 15% to 17.25%. Additionally, they plan to increase the SparkLend DAI Borrow APY (Annual Percentage Yield) from 6.7% to 16%.
Maker DAO also intends to make PSM adjustments, reducing the cooldown period for Debt Ceiling increases from 24 hours to 12 hours. They will also increase the Dai Savings Rate to 15% and decrease the GSM Pause Delay from 48 hours to 16 hours for faster implementation of future adjustments.
Impact of Adjustments on MKR
Within 24 hours of the proposal being raised, it was approved, and Maker DAO is set to implement these changes on March 10, 2024, at 19:55 UTC.
The implementation of the stability fees measure is crucial for sustaining the demand for Maker DAO-related products and accumulating its native token MKR. Since the proposal’s approval, there has been a significant buying momentum among MKR proponents, resulting in a 21% increase in the token’s value over the past 24 hours, reaching $2,451.46. The token has also followed the rally sparked by Bitcoin hitting a new All-Time High (ATH).
During the week, MKR has experienced a major uptrend, reaching as high as $2,481.
Hot Take: Maker DAO Prepares for Demand Shock Amid Bull Rally
Maker DAO has taken proactive measures to address any potential demand shock caused by user behavior during the current bull rally. By implementing changes such as adjusting stability fees and borrowing rates, Maker DAO aims to sustain demand and maintain the value of its native token MKR. The approval of these changes has already resulted in a significant increase in MKR’s price. As the cryptocurrency market continues to experience volatility, it is essential for projects like Maker DAO to adapt and ensure stability within their ecosystems.
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