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The makerdao community has approved a deployment proposal of approximately $100 million usdc in annual financing.
The decision to deposit the funds on the financing of the year will allow makerdao to obtain a yearly return of approximately 2% on the deposits stablecoin.
MakerDAO To Deposit $100 Million On Yearn
Decentralized finance (DeFi) protocol MakerDAO’s community has approved a proposal to deploy $100 million in USD Coin (USDC) on the DeFi protocol Yearn Finance. The funds will be deposited in a special investment account called "safe", which is managed through the funding of the year. The ceiling of the vault will be fixed to 100 million dollars and will enable makerdao to gain a return of approximately 2% per year, for a total of about 2 million dollars on an annual basis.
"Maker Governance voted to deploy 100 million USDC PSM in a custom-built safe @iearnfinance."
Solid endorsement of the proposal.
The proposal to deposit funds into Yearn was submitted in November 2022 and received strong support from the Maker community. Approximately 72 per cent of the members voted for the plan. The final implementation and transfer of funds will require a new "executive vote," as reported by makerdao.
A partnership between makerdao and yearn finance was proposed for the first time per yearn finance in November 2022. However, the partnership always requires final endorsement through a vote of the executive. Executive voting is the final step in the makerdao governance process and is mainly used in the implementation of a technical amendment to the manufacturer's protocol.
In Line With Long Term Vision
MakerDAO’s move to deposit funds on Yearn Finance is in line with the protocol’s vision of earning a steady revenue stream by the allocation of a part of its reserve assets to several yield-generating strategies such as investing in US government bonds and partnering with cryptocurrency exchange Coinbase. Within the framework of the joint venture with coinbase, COINBASE proposed that makerdao deposit of approximately $1.6 billion of a dollar coin (usdc) value onto the platform, enabling them to obtain an annual return of 1.5% per annum.
Makerdao also awarded usdc on a number of other decentralized funding platforms, including inactive, aave, and composite finance. In addition, since last month, stablecoin holders have also been awarded a 1% annual award. Makerdao is a platform run by a decentralized autonomous organisation (dao), as mkr token holders can vote on governance proposals.
The movement to drop usdc over the year could also improve the decrease activity of the protocol user. The total locked-out value (tvl) of the annual finance is currently approximately $442 million. This is a small fraction of the record LTV protocol of $6.9 billion that was achieved in December 2021, according to data from defillama. The locked total value is an indicator of the value of assets deployed as part of a protocol.
An Active Community
The MakerDAO community has been quite active when it comes to governance proposals and recently voted on two important proposals related to Alameda Research and Gemini’s GUSD stablecoin. In November 2022, the protocol announced that the community had voted and adopted a governance vote to withdraw the renbtc related to the search for alameda from its subsidiary safes. Action has been taken to reduce exposure to what dao considered to be a risky asset after ftx and alameda research collapsed.
The MakerDAO community is also debating about keeping Gemini’s GUSD stablecoin as part of the reserves. The vote comes in the context of growing concerns over a liquidity crisis that has had an impact on the Gemini accumulation program. Maker and Gemini announced a partnership in September 2022 that allows Maker to earn 1.5 per cent each time the GUSD in Makers Peg Stability Module (PSM) exceeds $100 million.
