MakerDAO has added a third asset to its decentralized finance (DeFi) platform, USD Coin (USDC), in response to the system’s flagship stablecoin, dai, continuing to float above its dollar peg.
Passed Tuesday at 2:58 UTC, the Coinbase- and Circle-backed USDC is now available for use as collateral on the premiere DeFi platform following an executive governance vote, according to a blog post.
Only $20 million USDC can be used on the system but with up to 20 percent interest rate earnings, according to the newly established USDC risk parameters. Users will be able to deposit USDC as collateral (in addition to the system’s two other underlying assets, ether (ETH) and Basic Attention Token (BAT)) and receive dai in return.
Almost $1 million in USDC-backed dai has been minted since the vote’s passage, according to data site Dai Stats.
At the heart of the USDC addition is a pressing issue: dai’s dwindling supply. Without a larger supply of dai on the market, the stablecoin went for a premium last week which threatened to capsize the largest DeFi platform.
When ETH lost 30 percent of its value in 24 hours on March 12, the whole network flipped into chaos, including dai’s price. Another ETH price crash could prove fatal, community members warned. Some 1.8 million ETH (or roughly $211 million as of press time) is currently locked in.
“I don’t think we ever have this [governance] conversation unless it was an absolute emergency,” said Chris Padovano, former legal advisor to the MakerDAO Foundation in a governance call Monday.
“We don’t know what’s going to happen in the next few days. If there was ever a time to be brave and do this, now is the time,” he said of adding USDC.
Dai’s peg has continued to sit uncomfortably high above the U.S. dollar after “Black Thursday.” Users flocked to dai for stability in the wake of ETH’s crash, increasing the token's price and lowering supply on th...