KIP-018 Lower Stability Fee to 20%





Lower the stability fee from 21.5% to 20%


kUSD has mostly maintained peg for a few weeks. At this point I believe that our high fees are hurting the protocol more than helping by hurting adoption.

Not only is Kolibri competing with other stables like Youves, we’re also competing with stable yields across the broader defi ecosystem. A stability fee of 21.5% puts Kolibri at near the top of the interest rates for borrowing against your crypto, and there aren’t corresponding incentives to offset this high interest rate. IMO this is one of the primary reasons we have seen a significant decrease in kUSD supply. Furthermore, I believe that improving XTZ/kUSD pair liquidity is more important than maintaining a very strong peg. Currently even modest amounts of volume affects the kUSD price significantly. We don’t necessarily have the luxury of worrying solely about the peg when there aren’t stableswaps and CEX listings available to help stabilize the price. But the only way we can get something like a CEX listing is to spur adoption, and making kUSD more accessible to everyone and freeing the millions and millions of XTZ laying idle to be used in Tezos defi.