MakerDAO to deploy a third of $1.6 billion USDC in Coinbase Prime

The communityMakerDAO supported the proposal to transfer one third of USDC from the Peg Stability Module (PSM) worth $1.6 billion to Coinbase Prime at an interest rate of up to 1.5% per year.

Coinbase Institutional Rewards (MIP81) has been approved by Maker Governance through a Ratification Poll.

🗳 https://t.co/7Hk6gqKTsO

This outcome enables Core Units to initiate the onboarding of 33% of the PSM’s USDC to @Coinbase‘s Institutional Rewards program.

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1/ pic.twitter.com/aOMdGev1QG

— Maker (@MakerDAO) October 24, 2022

Submitted in early October by the crypto exchange, the MIP81 proposal received 75% of the votes. Coinbase is a partner of Circle in the Centre consortium — the issuer of USD.

The implementation of the solution will allow MakerDAO to earn income from the Institutional Rewards program on the Prime institutional platform.

The asset placement terms provide for annual interest of:

• 1% on the first 100 million USDC;
• +0.1% on each additional 100 million USDC (maximum — 1.5%).

MakerDAO will be able to freely issue, redeem, withdraw and promptly (less than six minutes) use the placed coins in settlements.

Going forward, the partners plan to automate transactions between PSM and the Prime account via a smart contract or API.

The core DeFi protocol team will submit a Signal Request for community approval to include a legal entity on behalf of MakerDAO in the Institutional Rewards program.       

“It should be noted that any deployment, implementation or transaction related to MIP81 must be conducted via an Executive Vote, in accordance with the protocol’s functionality,” said MakerDAO.    

At the same time, the DAO of the DeFi platform ratified MIP 82. The proposal allows Coinbase to lend 200-500 million USDC collateralized by Bitcoin and Ethereum at a 125% collateralization ratio.

It is expected that the interest rate will be 4.5-6%. The rate, as well as the loan amount, will be determined later.

In the third quarter, MakerDAO’s revenue fell 86%, to $4 million.

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