MakerDAO Boosts Dai Savings Rate (DSR) and Sees Increased Market Cap
MakerDAO recently implemented the Enhanced Dai Savings Rate (EDSR), raising the maximum DSR from 3.19% to 8%. This move aimed to incentivize more Dai holders to deposit their tokens on the Maker protocol and earn interest. Since the implementation, Dai’s market cap has increased by over $570 million, and the number of Dai in the DSR program has surged from 396.8 million to 906.7 million.
MakerDAO Co-Founder Proposes Optimization Plan for EDSR
Christen Rune, co-founder of MakerDAO, has proposed an optimization plan for the EDSR due to the dominance of ETH whales over regular Dai holders in terms of benefits. He identified the practice of “borrow arbitrage,” where traders borrow Dai at a lower rate and deposit it in the EDSR program for higher profits. To address this, Rune suggests reducing the maximum EDSR interest rate to 5% and increasing the DAI borrowing rate to match it. He also proposes implementing Tier 1 and Tier 2 EDSR to make the plan more sustainable.
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MKR Token Price Declines Despite Success of EDSR
The native token of MakerDAO, MKR, has seen a decrease in price despite the success of the EDSR. MKR’s price has fallen by 0.84% in the last 24 hours and has lost over 8.26% of its market value in the last seven days. However, the token still maintains a positive monthly performance, gaining 32.30% in the last 30 days. At the time of writing, MKR is trading at $1,214.28 with a market cap of $1.18 billion.
Hot Take: MakerDAO’s EDSR Boosts Dai Market Cap, but MKR Token Faces Bearish Trend
The implementation of the Enhanced Dai Savings Rate has led to significant growth in Dai’s market cap, attracting more holders to deposit their tokens. However, the success of the EDSR has not translated into a positive price trend for MKR, which has experienced a decline in value. To address the dominance of ETH whales and make the EDSR plan sustainable, MakerDAO co-founder Christen Rune has proposed adjustments to the interest rates and utilization ranges. The future of MakerDAO and its native token, MKR, will depend on how these proposals are received and implemented.
