MakerDAO, the decentralized autonomous organization (DAO) that governs the DAI stablecoin, voted overwhelmingly to keep USD Coin (USDC) as primary collateral for DAI. An alternative proposal has been put forth to "diversify" the US dollar Gemini (GUSD) and Paxos US dollar (USDP) collateral. refused in a vote of 20% to 79%, according to the official page of the proposal.
In the proposal published on March 17, the MakerDAO Central Risk Unit He suggested that the risk of a cascading bank run in the US has been reduced, thanks to responses from the US federal government. As a result, the risk of using USDC as collateral "has decreased significantly since last week and no further solvency or severance issues are expected at this time."
However, he also argued that some risks remain. USDC has a "potentially riskier exposure to uninsured bank deposits" and "a weaker legal structure" compared to its competitors, GUSD and USDP, according to the proposal.
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The Nucleus of Risks offered two options to "normalize" the DAI issuance rules now that the crisis has passed. The first option was to spread the minting capacity limits between USDC, GUSD and USDP. If this option were chosen, the fee for converting USDC to DAI would drop from 1% to 0.05% immediately, but would not drop completely to zero until a later date.
The Central Risk Unit stated that this first option would โmore evenly distribute Maker PSMโs stablecoin reserves across various assets,โ reducing the risks of a USDC drop.
The second option was to increase the minting capacity of USDC to DAI from its current 250 million to 450 million and reduce the fee to 0%. In this case, the rules for minting DAI would move "closer to their previous state," which would cause DAI to "continue to have huge exposure to USDC," he said.
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MKR holders overwhelmingly approved of the second option, with 79.02% voting in favor versus 20.69% for the first option. Less than 1% (0.29%) voted to reject both options and 0.15 MKR votes (about 0%) were used to abstain.
After a wave of bank failures, the USDC stablecoin lost its $1 peg on March 11, briefly dipping below $0.90 per coin. In response, MakerDAO implemented extraordinary measures intended to prevent arbitrageurs from throwing their coins into the protocol and causing DAI to go uncollateralized. The fee for minting DAI using USDC as collateral was raised from 0% to 1%, and the daily minting limit for this process was lowered from 950 million DAI to 250 million DAI.
But on March 13, the USDC regained its $1 peg, rising as high as $0.9987. However, the extraordinary measures were still in force on March 23, before the approval of this proposal.
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