Increasing Stability Fee in Pando Leaf
We have been monitoring market conditions closely and have determined that a rate adjustment is necessary in order to maintain the stability and health of our stablecoin.
on Aug 25, 2023, Pando Leaf will increase the stability fee to mint pUSD against the range of the supported collaterals to better adjust to the market situations.
This decision has been made due to a number of factors, including the rising cost of capital in the market, particularly as a result of the global interest rate hikes.
The changes will affect on all the supported collaterals, from 8.5% to 11.5%.
What does this mean to you?
After the increase in the stability fee takes effect, borrowing pUSD will become more expensive. You will then need to be paying 11.5% annually on any pUSD you have borrowed instead of at the current rate.
Between now and then, you can pay down debt at the current lower rate if you do not want to continue with a 11.5% stability fee after the adjustment. Please be noted that if you choose not to repay your debt, the new stability fee will increase your accumulated debt balance and thus reducing your collateralization ratio and potentially putting your debt at higher risk of liquidation. It's advised that you check your debt's collateralization ratio and make sure it will be in a safe range to avoid liquidation of your colleteral.
The information contained in this article is for informational purposes only and does not constitute financial, investment, or other professional advice. The views expressed in this article are those of the author and do not necessarily represent the views of the company or organization they work for or Pando. Any investment decisions made by the reader should be made after consulting with their own financial advisor and conducting their own research. The author and the company or organization they work for and Pando will not be liable for any financial losses incurred as a result of reliance on the information contained in this article.