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Crypto Lending Protocol MakerDAO Approves Transferring a Maximum of $500M in USDC to Coinbase Custody for 2.6% Yield
The maneuver is part of MakerDAO’s earlier decision to move up to $1.6 billion of USDC stablecoins to Coinbase’s custody arm.
Updated May 9, 2023, 4:12 a.m. Published Apr 20, 2023, 8:33 p.m.
Crypto lending protocol MakerDAO approved opening a real-world asset (RWA) vault for Coinbase Custody and the transfer of up to $500 million in USDC stablecoins, according to a vote concluded on Thursday.
The U.S.-based crypto exchange’s custodial arm will pay a 2.6% annual yield on deposits, a related post on Maker’s governance forum said. The proposal forbids Coinbase Custody to rehypothecate – lend, reinvest or use in other ways – the assets in the account.
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Coinbase must keep the tokens in cold crypto wallets, the Maker community favored in a parallel vote. Maker will be able to withdraw funds from the vault within 24 hours, and funds in cold storage are insured up to the $500 million limit.
Maker, one of the largest decentralized lending protocols, is led by a decentralized autonomous organization (DAO), in which holders of its native token vote on proposals. The protocol also issues the $5 billion DAI stablecoin, backed by some $7 billion worth of assets in Maker’s reserves.
The latest development is part of implementing an earlier decision to transfer up to $1.6 billion USDC to Coinbase to earn yield. The platform has been pursuing a strategy to diversify its reserves and increase revenues by investing in yield-generating traditional financial assets, including U.S. Treasury bills and loans to banks.
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