[Discussion Poll] New ETH Collateral Type with Stability Fee Cap?

With the fixed rate market 25X larger than the variable rate market, I’ve been thinking maybe we should be putting more attention into exploring the opportunity to have a new ETH collateral type that offers a Stability Fee cap to increase Dai supply. Aave has both a variable and fixed rate giving the user options to choose from when taking a loan. For example, Aave’s current Dai rates are:
Variable: 5.99%
Stable/Fixed: 7.78%

My understanding is the current Stability Fee structure is:
Stability Fee = max(Base Rate + Risk Premium, 0%) where the SF > or = 0%. We could potentially add a new collateral type that would receive an added max SF rate parameter. I’m interested to get some feedback about the idea.

Is a New ETH Collateral Type with a Stability Fee Cap a good idea?

  • Yes
  • No
  • Abstain

0 voters

If Yes, what should be the Max Stability Fee Rate? (%)

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  • 3
  • 4
  • 5
  • 6
  • Abstain

0 voters

If Yes, what should be the Initial Debt Ceiling? (in Million)

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  • 10
  • Abstain

0 voters

Fixed rate are a good idea, but the DAI Credit System is not the best place for that as rates are a strong tool to manage the DAI peg. It would complexify the component.

Third parties should do that (work from @Akiva https://www.akiva.capital/ or Yield) or we can do that but separated from the DAI Credit System.

4 Likes

more than 6%. maybe 7%, just below Aave.

Delta already offers DAI fixed-floating swaps. Rho is another potential provider for this product.