Coinbase proposes to MakerDAO

Plan could see MakerDAO net $24 million a year

Coinbase has sent a plan to MakerDAO that would see the company pulling $24 million a year. 

The crypto exchange made a proposal stating the DeFi project should deposit $1.6 billion USDC onto Coinbase institutional, which is the institutional arm of the company and earn yields at 1.5%

MakerDAO’s Peg Stability Model would be the source of the sum. The PSM is a smart contract that aids in the DAI retaining its $1 peg. The proposed rate is expected to yield $24 million a year in revenue for MakerDAO. 

MakerDAO has made it clear there are new ambitions for the company. The co-founder of MakerDAO, Rune Christensen has stated how he believes a de-pegging of the DAI may be the only way for a truly decentralized product that can also be immune to future attacks.  Centralization has also been a major talking point within the community and after the sanctions made on Tornado Cash Christensen went on to write a proposal to reduce DAI’s sizeable collateral dependence.

MakerDAO plans to improve revenue by investing its reserves into alternative assets which includes stocks, bonds, and mutual funds. Currently the MakerDAO stablecoin makes up 60% of the balance sheet for the company which has been stated to provide no revenue for the company at all.

Coinbase has also offered to release holding fees for the USDC and remove any lock-up period as well.The community of MakerDAO was a bit mixed on their reaction to the proposal as some stated the yield was too low and others spoke on the centralization of the idea. A MakerDAO delegate Chris Blec had this to say:

“So, Maker’s Growth Core Unit went out and proactively approached Coinbase in a quest to move PSM collateral, which already poses an existential threat to DAI, into an additional layer of completely centralized corporate custody?” 

Some called the move “low cost and low complexity” stating that the bonus was that the offering does not have much risk to it.

Christensen wants DAI away from centralized Collateral which includes the USDC offered by Circle, as some in the community state this offer seems to push MakerDAO back into a direction of centralization it is not sure if Christensen will be open to the offer made by Coinbase.


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