MakerDAO’s decentralized U.S. greenback stablecoin, DAI, has considerably lowered its reliance on USDC as a collateral asset over the previous few months.
The quantity of USDC used as backing inside MakerDAO’s peg stability module (PSM) has fallen considerably for the reason that begin of the 12 months. The PSM permits customers to deposit USDC and mint DAI at a 1:1 ratio, serving to to maintain the stablecoin pegged to the U.S. greenback.
In January 2023, about $2.4 billion of USDC was locked within the PSM, per DeFiLlama knowledge. Now, this quantity has shrunk to round $520 million — indicating a 78% decline within the quantity of USDC immediately used to again DAI in its personal contracts. That stated, the challenge nonetheless has some further publicity to USDC by its settlement with Coinbase.
Notably, USDC’s general share for DAI’s collateral reserves has dropped from round 50% to merely 8%, in accordance with DeFiLlama knowledge. The present provide of DAI stands at 4.7 billion.
“USDC [reserve] goes down as we have now lastly methods to get yield from these unproductive asset,” Sébastien Derivaux, analyst at MakerDAO’s Strategic Finance unit, advised The Block.
The discount was largely attributable to MakerDAO’s transfer to diversify its stability sheet with real-world property, the core workforce stated. It highlighted that MakerDAO has utilized $1 billion price of its USDC reserves to buy U.S. Treasury payments and moved an extra $500 million price of USDC, transferring it to Coinbase Custody to earn rewards.
MakerDAO USDC Reserves | Supply: DeFiLlama
In the meantime, the function of Ethereum derivatives as DAI’s collateral has surged. Wrapped ether (WETH) and wrapped staked ether (wstETH) now characterize the most important chunk of DAI’s collateral, accounting for $4.3 billion, or 68%, of the whole collateral worth.
In a big improvement, wstETH has gained floor in current months and is closing in on WETH by way of the whole worth locked (TVL) inside MakerDAO. This implies DAI can make the most of Ethereum staking rewards, which can enhance its backing over time.
