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What Is the Purpose of the Stability Fee in a CDP System?

An annual interest rate on stablecoin debt used as a monetary policy tool to manage the peg and cover protocol operating costs.
Greeks.Live21.11.25

What Is the Purpose of the Stability Fee in a CDP System?

The Stability Fee is an annual interest rate charged on the stablecoin debt generated by a Collateralized Debt Position (CDP). It serves two main purposes: it acts as the primary tool for the DAO to manage the stablecoin's monetary policy, helping to maintain the peg, and the accumulated fees are used to cover the protocol's operating costs and potentially buy back and burn the governance token.

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