MakerDAO Retains USDC as Main Collateral for Dai

Since there’s a chance of hazards being linked with USDC, the MakerDAO Danger Core Unit not too long ago proposed the notion of diversifying the collateral for Dai. This suggestion was made as a response to the proposal. Nonetheless, MKR holders voted decisively in assist of sustaining USDC as the most important collateral for Dai. With a vote of 79.02% in favor of increasing the USDC-to-DAI minting capability and reducing the fee to 0%, MKR holders voted in favor of retaining USDC as the first collateral for Dai.

Because of USDC’s “presumably extra harmful publicity to uninsured financial institution deposits” and “a weaker authorized framework” compared to its rivals, the suggestion suggested diversifying collateral into GUSD and USDP. However, based on the Danger Core Unit, the dangers which can be related with using USDC as collateral have dramatically diminished from the earlier week. This info was supplied by the Danger Core Unit.

When a string of failed banks compelled the USDC to briefly lose its $1 peg, the choice was made to take care of USDC because the principal collateral for Dai transactions. In response to this, MakerDAO has launched efforts to stop Dai from being undercollateralized. These actions embrace rising the cost to mint Dai utilizing USDC as collateral from 0% to 1%, in addition to decreasing the day by day minting cap for this process.

A vote of confidence within the stability of the USDC stablecoin and its capability to retain its $1 peg might be inferred from the truth that USDC will proceed to function the principal collateral for the Dai cryptocurrency. But, this does deliver up issues concerning the attainable hazards which can be related with putting a major quantity of reliance on a single collateral merchandise.

It’s fairly attainable that new discussions and disputes round collateral diversification will proceed to emerge inside decentralized autonomous organizations reminiscent of MakerDAO because the cryptocurrency market continues to broaden and stablecoins turn into extra broadly used.