A proposal seeking to temporarily increase the interest rate granted to holders of stablecoin Dai was approved by the MakerDAO community on July 27, raising yields for tokenholders to as high as 8%.
The proposal introduced the Enhanced Dai Savings Rate (EDSR), a mechanism that temporarily increases the effective Dai Savings Rate (DSR) available to users. The enhanced mechanism will be determined by the DSR utilization and will be reduced over time as the DSR utilization goes up.
MakerDAO raised its DSR to 3.49% in June, hoping to make DAI more competitive. The effort, however, resulted in less than 7% of the total DAI supply deposited in the DSR.
“In practice though, DSR utilization is near 0, which gives us excessive margins and a huge windfall of surplus on top of what we would naturally be earning with the protocol at this size," reads the proposal. “The income we are currently earning is much greater in reality than what is even shown on e.g. makerburn."