MakerDAO Has Voted To Entrust Coinbase With The Custody Of $1.6 Billion In USDC

Published on:

Last Updated on October 25, 2022 by Bitfinsider

Coinbase’s institutional-grade service will be used to store $1.6 billion worth of the USD Coin (USDC) treasury that is owned by MarkerDAO. This will enable the DAO to earn rewards of up to 1.5% on the assets.

After having been presented by Coinbase Institutional on September 6, the proposal was finally approved on Monday afternoon with 75% of the votes in support of it. The USDC is equivalent to one-third of the treasury that backs the Peg Stability Module. This module enables users to deposit collateral in exchange for DAI, which is Maker’s stablecoin that is pegged to the value of the US dollar.

According to the proposal, Maker will not be required to pay a custody fee, but the community will be required to vote on whether or not to continue having its money stored with Coinbase beyond the conclusion of the trial term at the end of the year.

According to a thread that was posted by Maker on Twitter, the first step that MakerDAO will need to do is to establish a legal organization that is eligible for participation in Coinbase’s institutional rewards program.

According to a post on the company’s blog, the deposit will roughly quadruple the $1.7 billion worth of USDC that Coinbase was holding on behalf of users at the end of June.

According to Jennifer Senhaji, head of growth and business development at MakerDAO, “the additional monthly revenue generated through this deal enables Maker to further advance its overarching mission to create a global, trustless financial future built on decentralized rails.” This was stated in the post. “The additional monthly revenue generated through this deal enables Maker to further advance its overarching mission to create a global, trustless financial future.”

According to CoinGecko, the governance token for MakerDAO, known as MKR, was trading at $926.20 as of Monday afternoon. This represented a decrease of 3% over the course of the previous day and a decrease of 16% in comparison to the previous week. As of the time this article was written, DAI, Maker’s stablecoin, is the fourth largest with a market valuation of $5.8 billion. This represents around 4% of all stablecoins that are currently in circulation.

A boost would be helpful for both DAI and USDC. According to CoinGecko, the market caps of the stablecoins have decreased over the past month, with DAI’s dropping by 11% and USDC’s dropping by 12%. Since both stablecoin issuers create new tokens when their coins are bought on an exchange and destroy those tokens once they have been redeemed, this indicates that the corresponding stablecoins have most likely been exchanged for fiat currency or another kind of currency.

Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.