MakerDAO partners with Coinbase to custody $1.6 billion USDC

The largest cryptocurrency exchange in the US, Coinbase, has announced a partnership with MakerDAO governance. This partnership was enabled by a proposal passed by the MakerDAO governance to custody $1.6 billion in the USDC stablecoin with Coinbase Prime.

MakerDAO partners with Coinbase

It will be the first time Coinbase will extend the USDC rewards program to an institutional client. The exchange has said that MakerDAO will custody the funds on Coinbase Prime, and it will earn a 1.5% interest on the holdings.

This proposal was passed by 75% of the votes, equating to 109,944 MKR tokens. MakerDAO is now the largest holder of USDC. USDC is one of the largest stablecoins, and over the years, it has increased its market share.

The growth and business development head at MakerDAO, Jennifer Senhaji, said that the monthly revenues generated through this deal would support Maker in advancing its overarching mission to support a decentralized financial future.

However, the partnership will dent the decentralized nature of MakerDAO’s stablecoin known as DAI. The stablecoin will now be collateralized by a centralized stablecoin. The USDC stablecoin will comprise a third of the treasury, supporting the stability of the DAI peg.

Holding USDC is part of the “Endgame Plan” by Maker. The company plans to increase the collateral backing DAI by diversifying into real-world assets and short-term bonds. The long-term objective of this plan is to transform DAI into a free-floating asset that is not pegged to USD.

Coinbase stock tanks

The cryptocurrency market has dropped significantly over the past year. Amid the bearish trend, Coinbase stock has plunged in tandem with tech stocks and the global cryptocurrency market.

Over the past day, COIN registered a notable gain of 7%, trading at $71.38 at the time of writing. COIN tends to perform in tandem with the cryptocurrency markets, and over the past four months, it has registered a sideways trend. COIN has dropped by around 80% since creating an all-time high in November last year.

On the other hand, MKR, the native token of MakerDAO, has gained 1.9% over the past 24 hours and was trading at $936 at the time of writing. MKR has plunged by 85% since hitting an all-time high of over $6,000 in May last year. MKR is also down 14% over the past two weeks.

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