That's kind of the point. There's an oversupply of Dai right now, so increased stability fees are designed to incentivize people to buy Dai and close their open CDPs.
The loan aspect of MakerDao is cool, but its primary function has always been to support the stability of Dai.
> There's an oversupply of Dai right now, so increased stability fees are designed to incentivize people to buy Dai and close their open CDPs.
But aren't they already incentivized to close? They can buy back DAI on the market at a discount of 2 % ( $0.98 vs $1.00)
Therefore, this stability fee increase only seems like a "double incentivization". I don't see how this is an efficient mechanism. The market is already doing this thing naturally.
Why changing the stability fees with a random percentage increase every half month? Is letting the market do its thing not enough then?
It's just chasing market dynamics, for no apparent logic reason.
I think these Governance Polls are not being thought true that well. They should give it a longer timeframe to sample, like, give it 4 months or so and see how [that graph](https://lh5.googleusercontent.com/FC1njby7Eqkl_YAsTunRP11JBiF6PX8c1vdvr-hLFSoJcPvbZq25XP-zBY50r0A8EM039KpynTFJ_HDYS90SDAHSol-D-21UlJKakvo6o3GHgxxOQnipLUEhmRQUl7trtdgf0JQQ) behaves on longer periods.
We could very well be looking to noise or to a wave, that will trade between $0.98 and $1.02 over longer periods of time.
I believe changing the fee every few weeks could be a short-sighted move, but I'm probably missing something.
aren't the exchange fees the main culprit here? Buying something for $0.98 knowing it's worth $1.00 is a no-brainer, **unless** there are exchange fees to be paid (fees being, trading fees, withdrawal fees, and "risk factor fees"). This could also put the market price below that $1.00 since arbitrage investors are trying to cover these costs.
This could mean that, with all factors combined, the **true worth** of a DAI is $0.98 with all current mechanisms. Which is still a stable value. Ok, now I see that an increase to 3.5% could be the artificial thing that brings it to a consistent $1.00 since that 3.5 % **could be the number that covers** these exchange fee costs, and thus possibly increasing the stable value to $1.00
This will basically mean that the end-user (the person opening the loan) indirectly pays for all of the exchange trading fees, withdrawal fees and exchange risk fee. Will be interesting to see how this is going to play out.
Kinda sad that we can't have 0.50 % loans due to, again, the problem of centralized parties ( = the exchanges). They are once again the ones getting enriched, just like banks.