The MakerDAO community approves a temporary increase in annual returns for depositing DAI stablecoin, providing an 8% yield on holdings through Spark Protocol, albeit with some restrictions.
The MakerDAO community, which governs the Maker Protocol responsible for minting the dollar-pegged DAI stablecoin, has approved a temporary increase in annual returns for depositing DAI. This move allows for an 8% yield on holdings, with interest rate earnings on the DAI Savings Rate (DSR) enabled through Spark Protocol. However, this option is unavailable to non-U.S. users or VPN-linked addresses.
The Maker Protocol mints DAI against over-collateralized deposits of other cryptocurrencies, maintaining a dollar-peg. Since the activation of the Executive DAI Savings Rate (EDSR), the total amount of DAI deposited in the DSR contract has surged by 75.7%. Despite the attractive 8% yield, the increased savings rate is temporary and will revert to an interest rate closer to the protocol's average stability fee of 3.19%.
This temporary increase in returns is likely to attract user interest, though the restrictions on geographic availability will limit overall participation. The move serves to showcase the flexibility and adaptability of decentralized finance (DeFi) protocols in addressing market needs and opportunities.