MakerDAO Now Offering Savings Yields Higher Than Wall Street

The decision to hike savings rates will likely make DAI a more attractive asset for risk-averse investors

article-image

Lordn/Shutterstock.com

share

Decentralized financial services giant MakerDAO is hiking the savings yield for its stablecoin DAI from 0.01% to 1% after the latest governance vote.

All DAI holders are able to deposit their stabletokens into a Dai Savings Rate contract for a 1% annual yield — equivalent to an APY percentage. 

An increased savings rate will enable DAI to be more competitive than retail TradFi offerings.

Sam MacPherson, a protocol engineer at MakerDAO, tweeted, “In my view Maker should take strong action to halt the capital outflows from DeFi.”

The overall value of all assets locked across DeFi protocols is down 75% this year, shrinking from $166.7 billion to $42.41 billion, with MakerDAO making up about 16% of that total.

“This is ultimately good for the DeFi ecosystem as we will be able to keep the economic energy within DeFi,” he added.

Loading Tweet..

MakerDAO’s DAI savings interest rate is now higher than a handful of traditional US banks including Wells Fargo, which has a standard interest rate of 0.15% for its ​​Way2Save savings accounts and 0.25% for money market accounts.

TD Bank’s Simple Savings rate sits at 0.02%, while Chase Savings’ annual interest rate sits at 0.01%.

MakerDAO’s new DAI rate is still lower than 1-Year US Treasury yields, which currently sit at 4.64%. CapitalOne also offers 3% APY on certain savings accounts.

In any case, appetite for crypto borrowing has not been high since the downfall of centralized finance lenders such as Celsius and BlockFi, leading to low DeFi yields across the board.

“The DSR is the base rate of DeFi — it sets the lower bound for yields. Due to Maker’s size, increasing the DSR is akin to a rising tide that lifts all boats,” MacPherson told Blockworks.

“Aave, Compound and other money markets will be able to incorporate this yield into their protocols and pay users more for lending their Dai. This will slow down / halt capital searching for better returns at a bank and leaving the DeFi ecosystem,” he said.

MakerDAO’s latest decision to hike savings rates will likely make DAI a more attractive asset for risk-averse investors — especially those keen to look outside Wall Street for their savings interest.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Though the opposing flow trend is likely to slow over time, industry watchers note, bitcoin fund assets could one day eclipse the $90 billion gold ETF space

article-image

Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?

article-image

Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month

article-image

It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet

article-image

Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend

article-image

Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million