UPDATE: MakerDAO token holders have now voted to increase the DAI Stability Fee to 19.5 percent. 

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The dollar-pegged stablecoin DAI is still trading below one dollar but is now considered to be in a "stable" position.

From 0.5 percent to now 16.5 percent, the Stability Fee has been increased 33 fold over the past three months. Now, MakerDAO token holders have again voted to increase fees by another 3 percent to sit at 19.5 percent.

According to meeting minutes published on Reddit, COO of the MakerDAO Foundation Steven Becker highlighted during today's governance and risk call:

Since February, token holders behind the primary lending platform for DAI issuance – MakerDAO – has been increasing what is called the "Stability Fee" in efforts to make DAI loans more expensive. In doing so, the aim is to retract market supply of DAI and push DAI price up to dollar valuation.

The outcome of this week's vote according to head of community development Richard Brown was "a neck and neck race" between 2 and 3 percent. Starting Friday, a secondary vote will be held to execute this increase into the programmatic lending system.

Taking a step back, MakerDAO is the most popular decentralized finance (DeFi) application in the cryptocurrency space to date, according to crypto analytics platform DeFi Pulse. It holds over $300 million worth of ether, with the second most popular DeFI application – crypto lending application Compound – only holding about $33 million.

Soon, MakerDAO will also hold millions worth of other cryptocurrencies outside of ether through an ambitious upgrade to introduce what is called "multi-collateral DAI." For now, the stablecoin DAI is solely backed by native ethereum cryptocurrency, ether, and has a fixed supply cap of 100 million.

Given a persisting imbalance in DAI supply and demand, certain community members have advocated in the past that the supply cap on DAI be reduced as an additional measure to the Stability Fee increases.

However, as stated by Vishesh Choudhry of the MakerDAO Foundation Risk Team, consecutive Stability Fee increases do seem to be having a measurable impact on DAI price which presently sits between $0.97 and $0.98.

“What we’ve really seen is that as we’ve increased the Stability Fee over the past few weeks, the DAI price has stabilized a bit,” said Choudhry during today’s call. “There has been a lot going on with [ether] and with Tether so as always take everything with a grain of salt but I think that’s a positive indicator that what we’re doing actually has an impact.”

Cyrus Younessi – risk management lead at the MakerDAO Foundation – agreed saying that it seemed like “we’re headed in the right direction” and that perhaps more consideration should now be given over when to halt Stability Fee increases.

Younessi asked:

Stacks of coins image via Shutterstock