I’m not sure if I’d recommend holding them steady.
But I would not have recommended a rate cut that pushes us to the point of unprofitability simply to target ~20% of DAI source. I am staggered at the unfamiliarity with our own user base. The PSM accounts for ~54% of our DAI, and ~30% comes from our five largest users. Of what remains, most is not from small yield farmers.
We serve large DAI users, and we are where an institution can generate DAI without moving rates against themselves by their transaction size. We are not in the commodity lending business.
Additionally, these cuts are in the face of rising revenue and an all-time high of supply, with the PSM’s growth stalling. Even if you believed that unwinding billions in interest-free float that we can deploy for yield is a good goal, the trends are already more favorable.
So the goal is to target a minority of our current usage base by driving profits out of our own system in order to compete with protocols that must pay their users in order to compete with us? It’s madness.
And then to push such a drastic change on-chain without even waiting for input from the DAO community? Who is this self-appointed group who feels their opinions are so important and so well-considered that they do not require even a day’s discussion? Why are their opinions on whether Maker should even make or lose money more important than the decentralized autonomous organization they purport to serve?
Though it risks my own reputation to do so, I would be negligent to not point out that this small group of individuals – meeting behind closed doors, refusing observers, and pushing extremist policies into a vote without feedback as required by their own rules – is acting exactly like the centralized, power-hoarding financial system that everyone here seeks to escape.
As an archaeologist, let me assuage that fear, because context matters. Thank you for posting the links for future generations to get up to speed, though!