Coinbase Will Custody $1.6 Billion of USDC From MakerDAO As Votes Passed.
As the community has voted in favor, Coinbase to hold $1.6 billion of MarkerDAO’s USD Coin (USDC), enabling the DAO to receive rewards of up to 1.5%.
MIP 81 was approved by the MakerDAO stablecoin community, and was approved with 75% of the votes on Monday afternoon. The proposal was filed by Coinbase Institutional on September 6.
MakerDAO Community To Vote Again Whether To Continue With Coinbase Next Year
This will be a trial run for MakerDAO and Coinbase, where at the end of 2022, the community will vote again on whether to keep their USDC with Coinbase next year.
In order to earn 1.5% on the USDC for which Coinbase serves as custodian, MakerDAO joined Coinbase’s institutional rewards pilot program once MIP 81 was approved. The DAO Peg Stability Module (PSM), which is in charge of controlling the governance fees the MakerDAO receives from swaps, will continue to be accessible on Coinbase around-the-clock, every day of the year.
The issue of a $500 million USDC loan to Coinbase, secured by ETH and BTC and enabled through the PSM, will be issued as a result of the MakerDAO community’s approval of MIP 82. The interest rate on the loan will fluctuate between 4.5% and 6% each month.
According to a blog post, the deposit will nearly quadruple the $1.7 billion in USDC that Coinbase was holding on behalf of users at the end of June.
It should be noted that any deployment, implementation, or transaction related to MIP81 must be enacted via an Executive Vote, in accordance with the functionality of the Maker Protocol
The poll mentioned in this thread only expresses the approval of Maker Governance.
— Maker (@MakerDAO) October 24, 2022
According to CoinGecko, MKR, the governance token of MakerDAO, was trading at $924.48 at time of writing, down 2% from the previous day and 15.4% from the previous week. DAI, Maker’s stablecoin, is the fourth-largest stablecoin as of this writing with a $5.8 billion market valuation, making up about 4% of all stablecoins in use.
MakerDAO declared earlier this month that it will put $500 million into buying short-term corporate and treasury bonds in the United States. In light of this, the news about Coinbase today is yet another step in favor of centralized organizations and assets, presumably at odds with statements made by MakerDAO cofounder Rune Christensen that DAI should sell its USDC holdings.