TL;DR: “The Maker Foundation Interim Risk Team has placed an Executive Vote proposal into the voting system to enact a new Dai Stability Fee of 14.5%,” came the announcement on Twitter. It’s a raise of 3%, and some are pointing out how such a rate rivals legacy finance’s as credit cards schemes. At least one enthusiast commented, “This just feels like A16Z and all the whales are playing chess with the community as the pieces. We’re being played for a fool.”
Maker Foundation Votes to Enact New Dai Stability Fee of 14.5%
The token Dai is billed as the first fully-decentralized stablecoin on Ethereum. Its governing Foundation feels the “need to increase the Stability Fee” as it was discussed in a recent governance call this week. A stablecoin almost by definition should hover at parity with something like a fiat currency like the US dollar. The Dai has struggled, evidently, to maintain that peg “as the exchange price persists below $1, high inventory levels among market makers and prop desks, [and] little attributable impact from the previous Stability Fee increases” contribute to reasons for why the proposal is necessary, according to a blog post.
Maker’s charter is touted as freedom from volatility, and Dai is their attempt to have “a stable and decentralized currency that stands to transform the financial industry by allowing businesses and individuals to realize the advantages of digital money without experiencing volatility,” its website promises. Along those lines is the slogan of economic “opportunity for everyone,” where the ambitious goal of making financial services “once only for the select few are now open to all. Maker is an open platform that allows equal access to high quality financial services, including fair credit for everyone,” they claim.
One owner of a Maker collateralized debt position (CDP), where “individuals can increase their exposure to an underlying asset and effectively trade on margin,” isn’t satisfied at all with the rationales given. “As a CDP owner no,” the commenter explained on a subreddit. “I still have my CDP open but I’m pissed off. They say in crypto making 100% gains is easy so even a 25% stability fee is okay. That’s great but where are my 100% gains? They’re raising the stability fee during a time where majority of CDP holders have lost money.”
The CDP owner insisted the Foundation is “kicking people while they’re already down in the sand essentially. They WANT people to close CDPs now, which will hurt probably 95%+ of CDP owners if they were to close it, which people don’t want to take that loss so they will continue to hold their CDP through it. Problem with that is we become the 1%’s bitch since they’re the ones who control the stability fee,” leaving holders with an unenviable set of choices. “Don’t like the fee? Close your CDP and take the huge loss. Don’t want to close your CDP? Enjoy the soon to be 25% or more stability fee and deal with it, but don’t worry… 1000% gains is totally normal in crypto so it’s no big deal!”
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
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