MakerDAO, a decentralized finance lending project, has formed a business alliance with Coinbase crypto exchange. MakerDAO reportedly sealed the deal after accepted Coinbase’s proposal to keep custody of its $1.6 billion in USDC.
MakerDAO And Coinbase Formed A Partnership Deal
According to the report, MakerDAO signed a deal that made Coinbase the custodian of its large quantity of USDC stablecoins. Furthermore, the majority of the MakerDAO governance board reportedly voted in favor of the partnership.
In addition, Coinbase stated in a tweet that the partnership is the first time an institutional client would benefit from its USDC reward project. Also, the American exchange said MakerDAO would earn 1.5% interest on the USDC it holds with Coinbase Prime.
Furthermore, Coinbase stated that it believes stablecoins like USDC and USDT would be pivotal to the financial future. It added that USDC’s market share is rapidly growing in the industry.
Meanwhile, MakerDAO is now the decentralized lending protocol with the most significant possession of USDC stablecoins. Senhaji Jennifer, a top technician at MakerDAO, stated that the firm’s primary mission is to build a global blockchain-based financial future. She added that the revenues the firm would generate from the Coinbase deal would help MakerDAO achieve its goals.
USDC Is An Integral Part Of the MakerDAO Collateral Pool
However, the new development would affect the decentralized holistic nature of MakerDAO’s stablecoin, DAI, as USDC largely collateralized it. The centralized stablecoin, USDC, makes up one-third of the total treasury support that DAI is pegged to for stability.
In addition, USDC is also an integral part of MakerDAO’s plan to create more collateral to generate more short-term bonds and real-world assets. The firm also aims to transform its DAI into a free-floating token without pegging it to the US. Dollar.
Both Coinbase and MakerDAO’s tokens are struggling to say aloft in the overall bearish market. Coinbase’s stock, COIN, mimicked the crypto market as it continued to trade sideways.
In addition, COIN has lost about 80% of the all-time high value it attained in November, as it currently trades at $66.38. Meanwhile, MakerDAO native token, MKR, dropped from $975 to $916, losing about 6% of its value.
However, MKR spiked back to $933 earlier today and maintained the price level at the time of publication. MKR lost 85% of its all-time high value reached in May 2021.