MakerDAO officially raised the DSR (DAI deposit interest rate) to 8% in the early morning of August 7, Beijing time, in the form of short-term subsidies. 🎉This initiative aims to attract more funds to mint DAI with USDC to enable Maker’s growth flywheel. 🚀

However, this approach may reduce Maker's short-term profit expectations and affect the interests of MKR holders. 😔In addition, increasing the DSR may increase the stablecoin deposit returns of other lending protocols, exacerbating the demand for USDC. 💰

It is worth noting that with the implementation of EDSR, the issuance of DAI ended its long-term reduction phase and began to rebound again. 📈But after the end of EDSR, it remains to be seen how much funds will remain in the protocol. 🧐

In addition, increasing DSR brings new arbitrage space, such as staking ETH into wstETH, then staking wstETH in Maker to mint DAI, and finally depositing DAI into the DSR contract. 🤑

In short, increasing DSR is a short-term incentive measure. In the future, we need to pay attention to the implementation of Spark and other SubDAOs, as well as the retention of funds. 🔍