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:
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?
If Yes, what should be the Max Stability Fee Rate? (%)
If Yes, what should be the Initial Debt Ceiling? (in Million)