The MakerDAO community has approved a proposal by Coinbase to custody up to $1.6 billion USDC with the Prime reward program.
Earlier on Sept. 6, Coinbase submitted a governance proposal seeking to onboard 33% of MarkerDAO’s USDC holdings to the Coinbase Institutional Rewards program.
After due consideration by the MakerDAO governance forum, Coinbase’s proposal has received the green light.
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.
🧵↓
— Maker (@MakerDAO) October 24, 2022
Consequently, MakerDAO will commit $1.6 billion of its USDC holdings to Coinbase Prime. In exchange, Maker will earn a 1.5% reward for its deposits, approximately $24 million.
Expectedly, MakerDAO will be able to mint, burn, withdraw and settle transactions using its USDC at any time.
MakerDAO Business Dev. lead Jennifer Senhaji said that the collaboration with Coinbase satisfies the protocol’s longing to invest its collateral into short-term bonds that will generate more rewards for its operation.
Senhaji added:
“The additional monthly revenue generated through this deal enables Maker to further advance its overarching mission to create a global, trustless financial future built on decentralized rails.”
Win-win for Coinbase
USDC issuer Circle, is a portfolio company of Coinbase. Consequently, MakerDAO’s approval will help see the crypto exchange boost its USDC holdings while promoting the adoption of its stablecoin.
As of Q2 2022, Coinbase held custody of approximately $1.7 billion on behalf of its customer.
By committing $1.6 billion of its holdings, MakerDAO will help Coinbase retain its position as the leading choice for USDC holders.
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