MakerDAO, the decentralized autonomous organization that manages Dai and Stablecoin, has voted overwhelmingly to keep USDC. Serves as the main collateral for Dai. Another proposal to “diversify” collateral into Gemini Dollar (GUSD) and Paxos Dollar (USDP) was rejected by a 20% to 79% vote, according to the proposal’s official page.
In a proposal published on March 17, MakerDAO’s risk core unit said the risk of a chained bank run in the U.S. has been reduced because of the federal government’s response. As a result, the risk of using USDC as collateral “has decreased significantly since last week, and no further solvency issues or decoupling are currently expected.”
However, it also believes that there are still some risks. Compared with its competitors, GUSD and USDP, USDC is “potentially more risky for uninsured bank deposits” and has a “weaker legal structure,” the proposal said. Now that the crisis is over, Risk Core offers two options to "regulate" Dai's minting rules. The first option is to spread the minting power limit across USDC, GUSD, and USDP. If this option is selected, the fee for converting USDC to DAI will drop from 1% to 0.05% immediately, but will not go all the way down to zero until some point.
Risk Core said the first option would “distribute the Maker PSM stablecoin reserve more evenly across multiple assets,” reducing USDC depeg risk.
The second option is to increase the minting capacity of USDC to DAI from the current 250 million to 450 million and reduce the fee to 0%. In this case, the rules for minting Dai would be “closer to what they were before,” which would allow Dai “to continue to have substantial exposure to USDC,” it said. MKR holders overwhelmingly passed the second option, with 79.02% of votes in favor of it, compared to 20.69% for the first option. Less than 1% (0.29%) of people voted to reject both options, and 0.15 MKR of votes (~0%) were used to abstain.
The USDC stablecoin lost its $1 peg on March 11, briefly dipping below $0.90 per coin following a wave of bank failures. In response, MakerDAO implemented unconventional measures aimed at preventing arbitrageurs from dumping their tokens onto the protocol and undercollateralized Dai. The fee for minting Dai using USDC as collateral has increased from 0% to 1%, and the daily minting limit for this process has been reduced from 950 million DAI to 250 million DAI.
But on March 13, USDC re-pegged to $1, rising to $0.9987. However, as of March 23, until the proposal is passed, the extraordinary measures remain in place.
