Our revenue is the product of the weighted average stability fee and the supply of DAI. In general if we can put DAI supply on an upward trajectory it would improve the outlook of MKR.
DAI supply peaked before the stability fee was raised from 3.5% to 7.5% around March 21st of this year. The rate has come down from its peak at 20.5% and is now 10.5%, but we are still well out of growth territory. Today, the most-effective return on DAI comes from repaying new CDPs. So, it is no wonder that the supply of DAI is not growing.
Current returns on DAI:
- Repay CDP: 10.5%
- dYdX: 8.66%
- Compound: 8.25%
- Nexo: 8%
It seems that if we were to lower the stability fee to 7% that we could see a return to upward growth, as DAI is strongly demanded by DeFi, without sacrificing too much revenue.