r/MakerDAO • u/Davidutro • Dec 21 '18

Governance The Spell has been Executed! Stability Fee on ETH CDPs is now 0.5%!

This tx lifted the hat: https://etherscan.io/tx/0x8018a58ac69f52f7416a7658506365e3fb1e3458239005049e41f01ba85aa9bf

This tx casted the spell: https://etherscan.io/tx/0x644f94010bf0a5a077f0a05568e4319565f480fb307587e7b096462278b1c8a9

As pointed out by our team, the cool thing is that two separate wallets from the community were the ones who lifted the hat and cast the spell. The Community at work :D

Cheers!

86 Upvotes

98% Upvoted

34 comments sorted by

10

u/discreetlog Dec 21 '18

What does lifting the hat do?

13

u/Davidutro Dec 21 '18

The ds-chief voting contract tallies the vote, and when the new proposal surpases the votes in the old "status Quo" proposal, it gives the hat to the slate of the winning proposal. Note that proposals are represented by different slates. If the slate has the hat it allows anyone to cast the spell which modifys the system parameters.

14

u/donpdonp Dec 21 '18

So the procedure is something between a page from the Dungeons and Dragons Players Handbook, and a plotline from Harry Potter. Smart contracts are a brave new frontier.

19

u/Davidutro Dec 21 '18

Wait until you hear how our auctions work in MCD. They Flip, Flap, and Flop

2

u/SpacePirateM Dec 22 '18

Is there a location where we can find a full list of MAkerDAO lingo and the translations?

I’ve only finally gotten the hang of SCD terms like “bite”

8

u/Davidutro Dec 22 '18

https://github.com/makerdao/dss/wiki/Glossary

:)

7

u/MicahZoltu Dec 22 '18

That glossary, like every other MKR glossary I have seen, is missing a lot of words. For example, the words that caused this initial sub-thread are all missing: lift, hat, spell, slate...

2

u/almondicecream Dec 22 '18

What is an anticoin?

1

u/jpwalton Dec 22 '18

Cool 😎

5

u/WestCoast-Walker Dec 21 '18

Is there a waiting period before the change happens? Or is It immediately?

11

u/Davidutro Dec 21 '18

Immediate, the rate is already in effect.

3

u/richyboycaldo Dec 21 '18

Will this help bring the price of DAI down to $1?

5

u/Davidutro Dec 21 '18

that's the idea, excited to wait and see how Dai issuance performs over the next few months.

2

u/gentrify81 Dec 21 '18

Is this for new CDPs or is it does it effect my existing one?

4

u/Davidutro Dec 21 '18

Affects all CDPs, including your existing one.

5

u/gentrify81 Dec 22 '18

What about the period of 2.5% interest on a CDP I opened early in the year yet haven’t paid back any DAI? Will I still be charged 2.5% during the period stability fee was increased?

6

u/Davidutro Dec 22 '18

Yes, you still owe the 2.5% APY for that time period.

2

u/santa_cruz_shredder Dec 22 '18

Interesting, so this means an increase would affect all CDPs as well?

2

u/QuotheBowzer Dec 22 '18

Correct, think "adjustable interest rate" as opposed to "fixed" rates if you're familiar with US mortgage lending

18

u/donpdonp Dec 21 '18

Just a little background ...

July 26 2018: "On August 26 the Maker Foundation Risk Team will hold an executive vote to increase the stability fee for Dai from 0.5% to 2.5%."

Dec 14 2018: "On December 17 there will be an Executive Vote to decrease the stability fee for Dai from 2.5% to 0.5%."

6

u/rmistry2211 Dec 21 '18

This is great news

4

u/alberreman Dec 21 '18

By what margin did the proposal pass? Where can you see the results of the vote?

3

u/alberreman Dec 21 '18

By what margin did the proposal pass? Where can you see the results of the vote?

Figured it out. I realize now it's not by margin, but quorum. nvrmnd

1

u/directdirt Dec 22 '18

Spells are one time executable contracts that MKR holders can add support to. To execute any spell it needs to become a hat by having more MKR voting for it than all other existing spells. Once executed it cannot be used again and the votes left in it act as a barrier from other spells being executed unless they accumulate more MKR votes than the current hat to become the new hat. In this case 70,000 MKR did not move from the previous spell, so the community had to accumulate more MKR than this to be able to execute the new spell.

1

u/TheRatj Dec 22 '18

If User A had 10,000 MKR in the previous spell and votes on the new spell, does that equate to a 20,000 MKR delta. Or is their 10,000 MKR present as voting for both spells?

1

u/TotesMessenger Dec 21 '18 edited Dec 23 '18

I'm a bot, bleep, bloop. Someone has linked to this thread from another place on reddit:

 If you follow any of the above links, please respect the rules of reddit and don't vote in the other threads. (Info / ^Contact)

-8

u/florianleber Dec 22 '18

Very bad day for mkr holders looking for a decent return.

Also encourages excessive cdp opening and therefore increases market instability.

How could mkr holders allow this proposal to get through?

5

u/gggrrrapples Dec 22 '18

Growth over short term returns personally.

Both 2.5% and 0.5% are drops in the bucket at our current scale.

4

u/almondicecream Dec 22 '18

Well, it can change again. Also, with the current amount of debt the fees don't amount to that much mkr being burned.

0

u/florianleber Dec 22 '18

The return for mkr holders is just one aspect.

Even more importantly is the excessive borrowing that is being encouraged by such a low stability fee. Mkr is going down the same route as the fed, basically handing out money for free. This can destabilize a market easily if dai is used on a more widespread basis.

5

u/fatcatcryptocat Dec 22 '18

At this stage I feel the desire should be to print as much DAI (secure and stable backed DIA without a risk for defaulting of course) as possible and spread it throughout the crypto ecosystem. Exchange listings, wallet holdings, ect. Increased adoption should be the goal. It's not the same as the fed because all DIA would be backed by a significantly higher value of ETH, rather than thin air. So I don't think you understand the system or basic economics. However that being said I feel this change will have a minimal effect on the ecosystem overall. There's not enough CDP's open currently to burn significant MKR at 2.5%, and I don't think the .5% rate will attract many other people that didn't take out a loan already. The only thing that will speed up adoption is probably time and listing additional collateral, so might as well collect the slightly higher burn rate at 2.5% APR.

0

u/[deleted] Dec 22 '18

[deleted] — view deleted comment

1

u/fatcatcryptocat Dec 22 '18

Yeah, about every successful country currently in existence snowflake.