First MakerDao, now Prisma proposes a 5% mint fee or 15% interest rates for minting its stablecoin

Prisma Finance, a DeFi protocol for borrowing against liquid staking tokens to mint the overcollateralized stablecoin mkUSD, has put forward a governance proposal to sharply increase the cost of minting its stablecoin, following a similar debate at MakerDAO over higher stability fees for DAI vaults. The Prisma proposal, shared on its official 𝕏 account, outlines two main options for mkUSD borrowers: either introduce a one‑time 5% minting fee on new stablecoin issuance or move to recurring interest rates of up to 15% on outstanding mkUSD debt, a major change from the protocol’s earlier low- or zero-interest design intended to bootstrap adoption. This mirrors the broader trend in DeFi stablecoin protocols reassessing risk, profitability, and long‑term sustainability as on-chain borrowing conditions shift. Prisma’s existing model, inspired by Liquity, combines a fixed minting fee (historically parameterized between 0.5% and 5%) and a borrow interest rate that at launch was set at 0% to encourage growth in mkUSD supply. The new proposal would effectively push Prisma from a “cheap leverage on LSTs” model toward a higher-cost borrowing regime, similar to MakerDAO’s recent moves to raise DAI vault rates in response to changing market yields and risk considerations. For users, these changes would materially increase the cost of leveraging liquid staking tokens such as wstETH, cbETH, rETH, and sfrxETH to mint mkUSD, potentially reducing leverage demand but strengthening protocol revenue and risk buffers. For the broader DeFi ecosystem, it underscores an ongoing shift where decentralized stablecoin issuers are prioritizing sustainable fee structures over aggressive growth, aligning borrowing costs more closely with risk-free yields and competitive opportunities elsewhere in crypto and traditional markets.

✨ AI-generated background, compiled from web sources — not editorial content.

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