MakerDAO Votes to Ditch $500M in Paxos Dollar Stablecoin From Reserve Assets

Decentralized concern (DeFi) lending protocol MakerDAO’s assemblage has voted to ditch $500 cardinal Paxos Dollar (USDP) stablecoin from its reserves, impacting fractional of the token’s supply.

Voters unanimously favored to alteration the indebtedness ceiling for USDP to zero from $500 million, according to a vote concluded Thursday.

The determination has a important interaction connected embattled stablecoin issuer Paxos, arsenic Maker’s treasury holds astir fractional of USDP’s $1 cardinal supply. This comes aft New York authorities regulators forced the institution successful February to halt minting Binance USD (BUSD), different Paxos-helmed stablecoin. The marketplace capitalization of BUSD has cratered to $5 cardinal from $16 cardinal since then, according to CoinGecko data.

MakerDAO, issuer of the $5 cardinal DAI stablecoin and 1 of the largest lending protocols successful DeFi, is aiming to boost its revenues by investing its immense reserves successful yield-generating strategies.

Gemini, issuer of the GUSD stablecoin, pays an incentive to MakerDAO for holding its stablecoin, portion MakerDAO volition soon gain a 2.6% output connected arsenic overmuch arsenic $500 cardinal of USDC from Coinbase Prime. The protocol besides progressively invests successful real-world assets (RWA) specified arsenic tokenized short-term U.S. Treasury bonds via concern absorption firms.

The proposal for booting USDP argued that holding the stablecoin does not accrue revenues for MakerDAO, hurting its superior ratio arsenic the protocol prepares to hike rewards complaint for its ain stablecoin, DAI.

“While Paxos has raised the anticipation of a selling interest scheme, to day determination has not been factual advancement towards implementing this,” per the proposal. “If selling payments are yet implemented, Maker would beryllium capable to summation USDP indebtedness ceilings successful response.”