Cryoto Currency

MakerDAO (MKR), to Move $1.6B to Coinbase Custody Programme By DailyCoin

© Stocksak MakerDAO (MKR) to Move $1.6B to Coinbase Custody Program

Coinbase, a crypto exchange, announced Monday that MakerDAO approved the proposal to transfer $1.6 Billion USDC to Coinbase Prime. This move will allow the protocol a 1.5% reward for the deposited funds.

75% of votes voted in favor of this proposal. The $1.6 billion USDC represents one-third of the DAO’s Peg Stability Module (PSM), which allows users to deposit USDC and mint DAI, the protocol’s native stablecoin.

“This proposed collaboration with Coinbase follows an approved signal of intent by the MakerDAO community to increasingly invest Maker’s collateral into short-term bonds. It was agreed that any collateral deployed should meet the criteria of offering safety, cost structure, and flexibility,” said Jennifer Senhaji, Growth and Business Development Manager at MakerDAO.

According to the proposal, MakerDAO won’t pay a custody fee. The community will also have the opportunity to vote on whether they want to keep the funds with Coinbase at year’s end.

Coinbase Prime, the most prominent institutional prime broker platform, is a leading platform for crypto assets. MakerDAO’s decision to move $1.6 billion in USDC to the program has almost doubled the amount of USDC Coinbase held on behalf of its customers, which was $1.7 billion in the second quarter of 2022.

“In addition to Coinbase’s established reputation, it has been a longstanding partner of 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,” said Senhaji.
MakerDAO recently experienced a decline in revenue due to slowing liquidations and weak loan demand. Messari claims that there was an 86% drop of revenue in the third quarter in 2022. This was due to revenue from ETH-based assets falling by 74%, 66% and respectively, 66%.

MakerDAO is looking for a place to park its unused Treasury funds in order to amend this and generate more revenue. The community voted to invest $500 million in US Treasuries and Corporate Bonds a few weeks ago.

According to DefiLlama Maker is the largest and most decentralized finance protocol with $7.75 billion in total valued locked (TVL). MakerDAO’s governance token MKR is currently trading at $922, down 85% from its all-time high of $6,292, according to CoinGecko.

The Flipside

  • Some criticize MakerDAO’s move, saying that it’s a step towards centralization, just like the recent decision to invest $500 million in US treasuries and corporate bonds.

Why you should care

MakerDAO is a decentralized financial platform that is the largest in the market. It’s also the largest single holder of USDC. MakerDAO has significant influence over the financial decisions of similar DeFi projects.

You might also like:

Maker (MKR), Project Review, Recent Developments. Future Events. Community

See original on DailyCoin

News Source and Credit

Stocksak Editorial

We are a financial blog that covers topics such as investing, saving, spending, and earning more money. Please feel free to peruse our site and read any of the articles that catch your interest.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button