Coinbase Partners with MakerDAO, This is the Goal!

Coinbase collaborates with Dao Maker. (Photo; Doc. AltcoinBuzz)

JAKARTA – One of the giant US crypto trading companies, Coinbase, has reportedly partnered with MakerDao, a decentralized financial lending platform. This partnership is meant for the storage of USDC stablecoins.

On October 24, Coinbase announced that MakerDAO governance had voted in favor of a proposal to deposit 1.6 billion USDC with Coinbase Prime.

This means that Coinbase has expanded its USDC rewards program to institutional clients for the first time, he added. MakerDAO will deposit funds with Coinbase Prime, the company's institutional broker, while earning 1.5 percent of it. The proposal was ratified with 75 percent of the vote, or 109.944 MKR tokens, on October 24.

“The MakerDAO community approved our proposal to hold up to $1.6 billion in USDC with Coinbase Prime. Marking the first time we will be offering USDC rewards to institutions. Excited for what this means for USDC, @MakerDAO and the stablecoin ecosystem as a whole,” reads the announcement from the Coinbase Institutional Twitter account @CoinbaseInsto, October 24, 2022.

Coinbase is confident that stablecoins will become an integral part of the future of finance. Its USD coin has increased its market share at the expense of industry leader Tether (USDT) over the past few years.

MakerDAO is now the largest USDC holder. Jennifer Senhaji, growth and business development officer at MakerDAO, commented that the additional monthly revenue generated through this deal “allows Maker to further advance its overarching mission of creating a trustless global financial future built on a decentralized pathway.”

However, the move eroded some of the decentralized properties of the Maker DAI stablecoin as it is now largely backed by a centralized stablecoin. USDC represents a third of the treasury that supports the Stake Stability Module which allows users to deposit collateral to print DAI.

This is part of phase one of Maker's “Endgame Plan” to upgrade its collateral to real-world assets and short-term bonds. The long-term goal of this plan is to make DAI a free-floating asset that is not pegged to the dollar. In the next three years, Maker will multiply real-world assets to accumulate Ethereum and increase the decentralized collateral ratio, as summarized from CryptoPotato.