In the MakerDAO community forum, BA Labs has suggested an emergency rate change in response to the extreme market volatility and substantial decrease in reserves.
In response to the pressing issues brought about by the present market situation, BA Labs—an important figure on the MakerDAO Stability Advisory Council—submitted a detailed plan to raise several fees associated with the DAI stablecoin on March 9.
As part of a predetermined expedited governance procedure in the language of the Atlas, BA-Labs is proposing adjustments to protocol parameters “given the current market circumstances,” according to BA Labs.
In their proposal, BA Labs aimed to boost the DAI Savings Rate (DSR) from 5% to 15% and, for certain vault types like ETH-A and WBTC-A, they proposed a stability fee increase of 6.41% to 15.25% and 6.68% to 16.75%.
According to BA Labs, “The DSR is an additional lever MakerDAO can employ to enhance the desirability of holding DAI,” thereby boosting DAI demand and ultimately mitigating the DAI price’s downward pressure.
In addition, the article proposed a reduction in the Governance Security Module (GSM) delay from 48 to 16 hours and an adjustment to the Peg Stability Module (PSM)-USDC-A DC-IAM ttl from 24 to 12 hours. These changes would streamline governance and improve DAI’s stability framework.
In order to prevent any short-term liquidity shortages, BA Labs indicated that “the fundamentals underlying DAI remain sound” and proposed an enhanced governance process.
The entire supply of DAI has dropped from almost 5 billion to 4.38 billion in the last week. The primary reason for this decline was the fact that the cryptocurrency market is quite unpredictable, with people producing and selling DAI for other assets at ever-increasing rates.
In response to the forum post, members of the community have shown their agreement by endorsing the mentioned modifications.
“We are working on incorporating these proposals and will offer updates as soon as they are available,” JanSky, the Reserve Governance Facilitator, said, acknowledging the proposal’s validity.
In preparation for an executive vote, the Stability Facilitator Ecosystem Team also gave its approval to the Accelerated Proposal.
Others in the community, including GFX Labs, agreed with the general idea and wanted to see it through, but they were against the DSR rise and wanted to see things change more slowly.
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