EULER DAO votes to increase income by 414% with new costs in the middle of the loan competition in Red – DL News

EULER DAO, the Crypto collective behind the popular loan protocol, votes on a proposal aimed at selectively increasing the costs of its products, which increases income by 414%.

If it is adopted, the proposal will add costs of 10% to Stablecoin Euler Prime chests and 10% fees on all Euler yield chefs.

The costs on all other products will remain the same.

“The selective strategy is smarter because the cost rate can be adjusted to adapt to the unique profiles of lenders and borrowers in each trunk DL News.

Objective Labs, a risk management partner of Euler Labs, designed the recommendations for the costs of the proposal.

According to Objective Labs calculations, the new costs will increase the annual DAO revenues by $ 714,000 to more than $ 3.6 million, giving the Crypto collective a larger basin of funds with which to play.

However, new costs will reduce the profit that Euler users can gain on their crypto. Some may look elsewhere for better places to deposit their assets.

Euler is a Defi loan protocol similar to Aave. It is made up of dozens of boxes where users can borrow the crypto against various forms of warranty, such as other cryptographic assets or even DEFI protocol deposits.

In 2023, the protocol was struck by a hack of $ 200 million.

Although the attacker then returned the funds, the incident trembled the confidence of investors in Euler, and the protocol remained in sleep for more than a year before relaunching in September.

Increased competition

In recent months, competition between lenders DEFI has intensified while the market reaches a summit of $ 112 billion.

Earlier this month, Aave’s DAO voted to launch a loan protocol on the white label on the Kraken ink ink in order to draw from the customers of the centralized exchange.

In January, Morpho did something similar when he signed an agreement with Coinbase to facilitate bitcoin supported loans for exchange customers.

Other DEFI lenders, such as Maple and Sky, are also locked in the battle on institutional customers.

EULER adding more costs at such a critical moment could be risky.

The protocol was maintained by initially doing as attractive and competitive as possible when it has relaunched.

But now, the protocol has increased to nearly $ 2.5 billion in deposits, it could add costs without having a negative impact, said Seini, said the pseudonym author of the proposal.

Balancing

Totomanov said that the introduction of costs to Euler yield boxes is unlikely to have a negative impact because they are already designed to provide higher yields to investors by taking more risks.

However, for other chests, such as those facilitating loans and borrowing from Ethereum, the addition of costs could be more detrimental.

Indeed, 90% of borrowers of Ethereum sur Euler are engaged in the loop, a strategy where the juice lenders of their Ethereum display renders by depositing and borrowed on several occasions Ethereum.

These users are particularly sensitive to changes in borrowing rates.

Last week, the sudden withdrawal of $ 1.7 billion from Ethereum de Aave caused an increase in borrowing rates in Ethereum, triggering a rush to loop trades.

“The billing of high costs on ETH inside EULER PRIME would result in a modest increase in income while driving outings,” said TOTOMANOV, explaining why OBJECTIVE LABS decided not to implement costs on the Ethereum de EULER PRIME market.

Until now, 100% of voters support activation fees in accordance with the recommendations of objective laboratories, or to go further and to give total control to the company on the management of costs.

Voting should end on Wednesday.

Tim Craig is the DL News -based correspondent, based in Edinburgh. Handle with advice Tim@dlnews.com.