MakerDAO Community Votes in Favor of Eliminating USDP Exposure
- A lack of income from USDP exposure was also cited as a hindrance.
- The voting proposal was to reduce the USDP debt cap from $500 million to zero.
On Thursday, voters decided unanimously to remove Paxos from the reserve asset holdings, after a vote on a governance proposal to reduce the USDP debt cap from $500 million to zero. There were 35 voters that cast a total of 73,249 MKR tokens.
According to the proposal’s authors at MakerDAO risk management business Monet Supply, USDP is less effective than other options like USDC for fostering DAI liquidity. A lack of income from USDP exposure was also cited as a hindrance to MakerDAO’s capital efficiency.
For the Gemini U.S. Dollar (GUSD) stored in MakerDAO’s Peg Stability Module (PSM), MakerDAO receives marketing incentive payments from other stablecoin issuers like Gemini. The defi protocol might get a cut of Coinbase Custody’s profits from the sale of its USDC assets.
Low Trading Volume
In January of this year, Paxos suggested that MakerDAO be charged a marketing fee that would be equal to the Effective Funds Rate on USDP. In return, Paxos asked MakerDAO to consider putting an additional $1.5 billion worth of USDP into the PSM. Paxos predicted that MakerDAO will see an increase in yearly sales of $29 million thanks to the strategy.
The stablecoin’s organic trading volume is rather low, and it is substantially less liquid in both centralized and decentralized marketplaces since MakerDAO controls around half of USDP’s outstanding supply.
Paxos’s Binance stablecoin BUSD was halted from being minted in February after the NY State Department of Financial Services (NYDFS) issued an order to do so. Since then, the market cap of the Paxos-issued stablecoin has decreased by $11 billion.
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Read more: https://thenewscrypto.com/makerdao-community-votes-in-favor-of-eliminating-usdp-exposure/
Text source: TheNewsCrypto – Blockchain & Cryptocurrency News M
