A Stability Fee is a charge applied to borrowers of certain decentralized stablecoin systems, primarily designed to maintain the price stability of the stablecoin. It functions as an interest rate on the collateral that users deposit to mint or borrow the stablecoin.The fee is typically calculated on an annual basis and is paid in the same stablecoin that was borrowed. Its purpose is to incentivize users to repay their loans, promoting the long-term stability of the stablecoin’s value. If market conditions lead to excessive borrowing or fluctuations in the collateral’s value, the Stability Fee can be adjusted by the governing body to help mitigate risks.In essence, a higher Stability Fee may discourage borrowing during volatile periods, while a lower fee can stimulate borrowing when the market is stable. By balancing supply and demand, the Stability Fee plays a crucial role in ensuring the stablecoin remains pegged to its intended value, usually a fiat currency like the US dollar.