MakerDAO is preparing for the worst (and that’s a good thing)

TL; DR

• MakerDAO has voted to increase fees on their stablecoin, $DAI, to help increase reserves from 5% to 15% as they expect greater selling pressure.

Full story

MakerDAO just made some fee changes to stock up on their DAI token reserves.

That can be experienced as very annoying, but comparable to the friend who takes extra time to pack a surplus of snacks for the road…

95% of the time we are very happy they did it.

Here’s what the stablecoin is up to:

MakerDAO operates the stablecoin $DAI, which is softly pegged to the US dollar.

The DAO is known for their structural safety: they conduct numerous audits and investigations.

Which in turn causes many investors to trust $DAI to store long-term value, or use it for everyday Real World Asset (RWA) transactions such as car purchases. Pretty cool.

All this adds up and makes it clear why MakerDAO is ‘over’ with the preparations.

As we enter a bull run, market volatility is increasing and coins like $DAI are seeing more selling pressure.

Think: more people selling stablecoins to buy BTC/ETH/SOL etc.

That brings us to the take-away:

Increasing reserves from 5% to 15% will help sustain the coin if there is a liquidity crisis (aka: a group of people trying to sell their $DAI tokens all at once).

Who knows if this will be necessary in the long run – either way, a strategic pre-emptive move like this can make or break a project when the markets turn.

So this is a smart move by MakerDAO.