- MakerDAO transfers $500 million to Coinbase’s custodial arm, Coinbase Custody.
- The crypto lending protocol indicated that the funds had been transformed into USDC utilizing PSM.
- Coinbase Custody will now pay MakerDAO a 2.6% annual return on deposits.
Crypto lending protocol MakerDAO transferred $500 million to international cryptocurrency change Coinbase’s custodial subsidiary, Coinbase Custody. Because of this choice, MakerDAO ensures an annual reward price of two.6%, which interprets into an estimated annual revenue of 13 million DAI.
Concerning the switch, Coinbase Institutional (@CoinbaseInsto) tweeted:
Yesterday, MakerDAO revealed that Coinbase had deployed 500 million DAI from the Coinbase Custody vault. Following the approval of the Coinbase Institutional Rewards proposal by Maker Governance, the funds have been transformed to USDC utilizing the PSM (Peg Stabilization Module).
Subsequently, the transformed funds have been deposited into the desired Coinbase Custody account. Coinbase mentioned the switch is step one in its USDC institutional rewards program launched in This fall 2022.
Going again to April 2023, the MakerDAO group authorised a proposal to open a real-world asset (RWA) vault for Coinbase Custody after which switch as much as $500 million in USDC.
In keeping with the proposal, Coinbase Custody is strictly prohibited from re-mortgaging the belongings held within the specified account. Because of this they aren’t allowed to lend, reinvest or use the deposited belongings in some other manner.
The crypto lending protocol has the power to withdraw funds from the vault inside 24 hours, and funds saved in chilly storage are insured as much as the $500 million restrict.
Even earlier than that, in October 2022, the MakerDAO group authorised a Coinbase proposal, permitting them to carry a most of $1.6 billion USDC by Coinbase Prime. MakerDAO was to earn a 1.5% reward on its USDC whereas holding funds with the institutional custodian.