MakerDAO proposes to increase the DAI savings rate from 1% to 3.49% and remove the USD stablecoin Paxos Dollar.

The decentralized stablecoin protocol MakerDAO has passed a governance proposal to increase the savings rate of DAI to 3.49%. Additionally, it has removed Paxos Dollar and significantly reduced the proportion of Gemini Dollar in its reserve assets, holding 50% and 90% of the supplies of these two stablecoins respectively. The future of these two stablecoin projects seems rather bleak.

DAI Savings Rate Increased from 1% to 3.49% as MakerDAO Vote Passes

Back in May, amidst the Federal Reserve's continuous interest rate hikes in the U.S., the core development team of MakerDAO, Block Analitica, proposed to raise the savings rate of DAI to 3.3%.

Now, the governance proposal has officially passed, increasing the DAI savings rate from 1% to 3.49%.

Note: DAI saving rates, DSR refers to the DAI savings rate, where MakerDAO provides a savings contract allowing users to earn interest by depositing their DAI, with the current rate at 1%.

MakerDAO Core Team Proposal: Increase DAI savings rate to 3.3%, Community Asks: Will the circulation of DAI increase or decrease?

This move will further attract users to hold and lend DAI, rather than the previously integrated USDC, USDT, and other centralized stablecoins by MakerDAO.

Of course, the additional interest comes from MakerDAO's revenue, benefiting from the shift to Real World Assets (RWA) in the past two years:

RWA Strategy: Who is Making Money in the Bear Market? MakerDAO Shifts to Real World Assets

Removal of Paxos Dollar, Sharp Decline in Gemini Dollar's Share

In a governance proposal on May 26, MakerDAO decided to remove the U.S. dollar stablecoin Paxos Dollar (USDP) from its reserve assets due to low liquidity and difficulties in aligning with real-world assets.

This decision will significantly impact USDP, which has a total supply of only about $1 billion, with MakerDAO holding approximately $500 million.

In early June, MakerDAO also made adjustments regarding Gemini Dollar (GUSD), planning to reduce the U.S. dollar stablecoin Gemini Dollar's reserve asset from $500 million to $110 million in a proposal.

This reduction is much more significant than that of USDP, as GUSD's total supply is only $566 million, with MakerDAO holding nearly 90% of the supply.

The governance proposal has now been approved and will be executed on June 19 at 14:00 UTC.