Nov 29, 2022•1 min read
The community of decentralized financial company MakerDAO is voting to increase the yearly return for its DAI stablecoin by up to 1%.
Members of the community can vote in a ranked-choice poll until December 1 to raise the so-called DAI Savings Rate to 1%, 0.75%, 0.5%, 0.25%, or leave it at its current 0.01% rate. MakerDAO started the voting process on Monday.
At the time of publication, all votes were in favor of raising the interest rate to 1%. This may change as more voters cast ballots.
The election is taking place as yields in decentralized finance (DeFi) have plunged due to a drop in demand for crypto financing. Meanwhile, conventional market yields have risen considerably as a result of the Federal Reserve's aggressive rate-hiking campaign, exacerbating capital flight from DeFi.
Investors in the second-largest stablecoin, USDC, for example, could earn slightly more than 1% per year by lending their holdings. This is a much lower annual rate than investing in US Treasury bonds, which yield around 4% and are considered the safest investments.
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