MakerDAO Votes to Keep USDC as Primary Collateral
- MakerDAO, the decentralized autonomous organization governing Dai (DAI) stablecoin, voted overwhelmingly to keep USD Coin (USDC) as the primary collateral for Dai.
- An alternative proposal to “diversify” collateral into Gemini Dollar (GUSD) and Paxos Dollar (USDP) was rejected in a 20% to 79% vote.
- The passed measure ends the 1% USDC-to-DAI minting fee that was previously implemented.
Risk of Using USDC Declines Significantly
The Risk Core Unit at MakerDAO proposed that the risk of using USDC as collateral has declined significantly since last week and further solvency concerns or depegs are not expected at this time. This is due to responses from the federal government reducing the risk of a cascading bank run in the U.S. However, it also argued that some risks remain such as potentially more risky exposure to uninsured bank deposits and a weaker legal structure when compared to its competitors GUSD and USDP.
Proposal Offers Two Options
The Risk Core Unit offered two options to “normalize” the rules for minting Dai now that the crisis has passed. The first option was to spread minting capacity limits across USDC, GUSD, and USDP. If chosen, this would reduce the fee for converting USDC to DAI from 1% immediately down 0.05%, eventually reaching zero at a later date. The second option proposed no change in parameters or fees for minting DAI with USDC collateral only.
Voters Reject Diversification Proposal
Ultimately, MakerDAO voted overwhelmingly against diversifying into other types of collateral with 79% voting against it compared with just 20% in favor of it. As a result, MakerDAO kept USDC as its primary collateral for Dai and ended the 1% minting fee associated with converting it into DAI.