Coinbase just submitted a proposal that, if approved by the community, could make MakerDAO $24 million a year.
The proposal comes just days after Rune Christensen pushed the MakerDAO protocol to reduce its reliance on USDC as collateral.
Coinbase Proposal
Coinbase’s proposal could influence MakerDAO to make major changes to its strategic growth plans. The Coinbase proposal states that MakerDAO deposited about $1.6 billion into its institutional platform Prime. If the proposal passes, MakerDAO could earn an annual yield of 1.5%, which would mean an increase in annual revenue of $24 million.
MakerDAO allows users to mint its DAI stablecoin based on the collateral users deposit into its protocol. Initially, the platform only supported ETH as collateral, but has expanded to include support for over a dozen new assets as collateral. According to data from Daistats, USDC accounts for a significant portion, roughly a little over a third of its total locked value of $9.3 billion.
Sabotaging Christensen’s MakerDAO plan
Coinbase’s proposal comes as MakerDAO founder Rune Christensen pushes to revamp the protocol and reduce its reliance on USDC to help it adapt to a number of challenges, such as U.S. government sanctions on Tornado Cash. Rune also hopes that reducing reliance on centralized stablecoins can help protect the protocol from further sanctions that could put stablecoin issuers like MakerDAO in limbo.
The Coinbase proposal could derail Christensen’s plan to make MakerDAO less dependent on stablecoins for revenue. Although he does not hold any official role in MakerDAO, Christensen remains an influential voice in the community and supports the protocol that floats DAI against the dollar. The move will significantly reduce the protocol’s reliance on USDC and other assets over the next few years, limiting its exposure to real-world assets to 25% by 2026. According to Christensen, the move will protect the protocol after USDC issuer Centre, which blacklisted several wallets following the Tornado Cash sanctions.
“The longest three years we can go before we have to be ready to accept the forfeiture of all centralized collateral.”
divided community
Coinbase’s proposal has divided the MakerDAO community, with some members saying Christensen’s plans should be put on hold given the benefits offered. Community members said that Maker’s balance was severely underinvested, which was detrimental to the protocol’s ability to take risks and its attractiveness as a stablecoin.
“With this [proposal], the puzzle begins to fall into place. “
Psychonaut of Immunefi also expressed support for the proposal, saying,
“Can we stop all the chatter about leaving and tightening our belts?”
Another member, Toch9.0, also criticized Christensen’s plan, saying,
“Many of us felt that Rune’s efforts to become DAO CEO were misguided, and were fed up with the pointless drama he created.”
It wasn’t all bricks for Christensen, however, as Coinbase’s proposal also received considerable flak from various parts of the community. MakerDAO, representing Doo_Nam, opposed the proposal, saying it was short-sighted and that protocol revenue should benefit MKR token holders first. Chris Blec slammed Coibase’s proposal, saying USDC poses an existential threat to DAI and needs to be eliminated.
“Moving USDC to Coinbase would add another regulatory attack vector that DAOs need to worry about. A vote on this proposal is a vote to put the entire fate of DAI and MKR in the hands of Coinbase, a company that is at odds with the interests of the less decentralized MakerDAO listed company.”
Meanwhile, MakerDAO is expanding support for real-world assets, despite Christensen’s calls.
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Source of information: Compiled from CRYPTODAILY by 0x Information.The copyright belongs to the author and may not be reproduced without permission