Coinbase submits proposal that could earn MakerDAO $24M annually

Coinbase has submitted a proposal that could spot MakerDAO (MKR) gain up to $24 cardinal annually if passed.

According to the proposal, MakerDAO volition transportation 33% of its $1.6 cardinal Peg Stability Module (PSM) — astir $528 cardinal — into a Coinbase Prime custody account to gain a 1.5% yearly output connected savings.

PSM is simply a mechanics designed to assistance support Maker’s DAI astatine $1. It was initiated during the 2020 crypto marketplace clang erstwhile the stablecoin spiked supra $1.

Since then, PSM has efficaciously helped DAI support its peg.

Recently, cardinal members of the DAO person raised concerns that the PSM is underinvested.

One of the members argued that the PSM underinvestment reduces:

“the protocol’s quality to instrumentality risks and its attractiveness arsenic a stablecoin.”

So, Coinbase’s connection is designed to supply a harmless concern avenue for Maker’s PSM. According to the proposal, the DeFi protocol volition not person to wage a custody interest to allocate its PSM.

Additionally, Maker Governance volition beryllium capable to mint, burn, withdraw, and settee USDC successful little than 6 minutes, accordant with Coinbase Prime.

“Coinbase is uniquely situated to connection a USDC Rewards Program to MakerDAO that meets this evaluative criteria. Specifically, Coinbase is an established, reputable, and regulated company.”

The connection besides explained however the rewards would beryllium paid and the outgo schedule.

DAO members bargain into the idea

Most of the comments connected the connection person been positive, saying the concern has constricted risks.

However, immoderate members said the 1.5% APY is simply a spot low. Instead, it should “be a adaptable complaint to lucifer the market, with the imaginable to summation arsenic DeFi starts to spot higher APR connected stables again station crypto winter.”

Meanwhile, immoderate members claimed the connection could impact Maker’s decentralization and adhd different furniture of regulatory onslaught to the protocol.

Members of MakerDAO halfway units, similar the Growth Core Unit, Collateral Engineering Services Unit, and Strategic Finance Core Unit, person besides expressed their enactment for the proposal.

A subordinate of Maker’s Growth halfway unit, Jenn said this isn’t the archetypal concern betwixt MakerDAO and Coinbase. The 2 entities person a agelong relationship, and this connection is conscionable different milestone successful that relationship.

The station Coinbase submits connection that could gain MakerDAO $24M annually appeared archetypal connected CryptoSlate.