The community of MakerDAO, the largest decentralized finance (DeFi) protocol, has approved a proposal to allow crypto protocol custody up to $1.6 billion USD Coin (USDC) worth approximately Rs. 13,156 crore with cryptocurrency exchange Coinbase. USDC will be held through Coinbase’s institutional custodial platform Coinbase Prime and offers a 1.5% return, with custodial funds accessible 24/7 to the Fixed Stability Module of the DAO as it looks to help drive the overall growth of stablecoins and DeFi ecosystems.
According to MakerDAO, 75% of the community voted to approve the Coinbase Institutional Rewards proposal, paving the way for the move.
Coinbase believes the proposal will also help grow the regulated USDC, expanding the institutional reach and rewards of stablecoins. Cryptocurrency exchange, among the consortium backing the launch of USDC and towards its growth, believes that USD-pegged stablecoins are on track to become a major player in a new financial model.
Follow suggestions, MakerDAO will not pay any custody fees to Coinbase. Additionally, the community will need to vote on whether they are willing to keep their coins in custody with Coinbase after the set testing period.
Jennifer Senhaji, Head of Business Development and Growth at MakerDAO, said in a statement“This proposed partnership with Coinbase follows an approved signal of the MakerDAO community’s intention to increase Maker’s collateral investment in short-term bonds. It was agreed that any any collateral deployed must meet the criteria for providing safety, cost structure, and flexibility.Coinbase is uniquely positioned to offer a USDC Rewards Program that meets these criteria. .”
MakerDAO is one of the first and largest decentralized lending protocols, often tagged as the central bank of cryptocurrencies. It also issued a $6 billion (approximately 49,326 crore) DAI stablecoin, whose value is backed by approximately $8 billion (approximately 65,702 crore) of assets in its reserve fund. The protocol is run by a decentralized autonomous organization (DAO) where contributors manage the platform and discuss decision-making proposals in a forum and governance token holders of the platform, maker (MKR), vote to approve or reject each proposal.
