MakerDAO Keeps USDC as Primary Collateral for Dai

Since there is a possibility of hazards being linked with USDC, the MakerDAO Risk Core Unit recently proposed the notion of diversifying the collateral for Dai. This suggestion was made as a response to the proposal. Nonetheless, MKR holders voted decisively in support of maintaining USDC as the major collateral for Dai. With a vote of 79.02% in favor of expanding the USDC-to-DAI minting capacity and decreasing the cost to 0%, MKR holders voted in favor of retaining USDC as the primary collateral for Dai.

Due to USDC’s “possibly more dangerous exposure to uninsured bank deposits” and “a weaker legal framework” in comparison to its rivals, the suggestion advised diversifying collateral into GUSD and USDP. Nevertheless, according to the Risk Core Unit, the risks that are connected with utilizing USDC as collateral have dramatically diminished from the previous week. This information was provided by the Risk Core Unit.

When a string of failed banks forced the USDC to briefly lose its $1 peg, the decision was made to maintain USDC as the principal collateral for Dai transactions. In response to this, MakerDAO has introduced efforts to prevent Dai from being undercollateralized. These actions include increasing the charge to mint Dai using USDC as collateral from 0% to 1%, as well as lowering the daily minting cap for this procedure.

A vote of confidence in the stability of the USDC stablecoin and its capacity to retain its $1 peg can be inferred from the fact that USDC will continue to serve as the principal collateral for the Dai cryptocurrency. Yet, this does bring up concerns about the possible hazards that are connected with placing a significant amount of reliance on a single collateral item.

It is quite possible that new discussions and disputes around collateral diversification will continue to emerge inside decentralized autonomous organizations such as MakerDAO as the cryptocurrency market continues to expand and stablecoins become more widely used.


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MakerDAO Increases US Treasury Bond Holdings by 150%

MakerDAO, a lending protocol and stablecoin issuer, has voted in favor of a proposal to expand the amount of United States Government bonds held in its portfolio by 150%, from $500 million to $1.25 billion. This would be a significant increase. This action is being taken with the goals of diversifying its liquid assets and earning a net yearly yield in the range of 4.6% to 4.5%. The remaining $500 million of USDC in the PSM will be handled by decentralized finance asset manager Monetalis Clydesdale. MakerDAO has plans to deploy $750 million of the USDC in the PSM to acquire further US Treasury bonds.

The bonds will be acquired with equal maturities, monthly, and over the course of a period of six months; the total number of slots will be 12, and each slot will be worth $62.5 million. After taking into account the costs of custody, the proposition is anticipated to result in a net yearly return of 4.6% to 4.5%. The income stream of MakerDAO can potentially benefit from an increase in trading expenses. This action will result in the continuation of Monetalis Clydesdale’s management of a current allocation of $500 million from the United States Treasury, which has been in effect since October 2022.

On the other hand, some people who took part in the governance forum had reservations about the proposition. They pointed out that MakerDAO has not yet received any money from Monetalis for the first half billion DAI, and they claimed that questions asked in Maker’s Discord and governance forum were not responded swiftly, which did not provide sufficient time to evaluate the proposal.

The failure of Silicon Valley Bank on March 11 caused widespread fear throughout markets and led to the depeg of a number of stablecoins, including USD Coin (USDC) and Dai. In response to this, MakerDAO said that its community was working on suggestions to convert its stablecoin exposure to money market instruments, such as U.S. Treasurys, “with the objective of diversifying DAI’s liquid collateral.”


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Jump Crypto, a Web3 infrastructure provider, and, a decentralized finance (DeFi) platform, have carried out a “counter exploit” on the Wormhole protocol hacker. As a result, the pair has reclaimed $225 million worth of digital assets and moved them to a secure wallet.

The Wormhole hack took place in February 2022 and resulted in the theft of around $321 million worth of wrapped Ethereum (wETH) by exploiting a weakness in the token bridge of the protocol.

Since then, the hacker has transferred the stolen assets using a number of Ethereum-based decentralized services (DApps), such as Oasis, which has recently opened up vaults for wrapped stETH (wstETH) and Rocket Pool ETH (RETH).

The team confirmed the existence of a counter exploit in a blog post that was published on February 24. The post explained that the team had “received an order from the High Court of England and Wales” to retrieve certain assets that were associated with the “address associated with the Wormhole Exploit.”

According to the team, the recovery was started using “the Oasis Multisig and a court-authorized third party,” which was named as Jump Crypto in an earlier report from Blockworks Research. The report also indicated that the retrieval was successful.

According to the transaction histories of both vaults, Oasis transferred 120,695 wsETH and 3,213 rETH on February 21 and stored them in wallets that are controlled by Jump Crypto. The hacker was also found to have around $78 million worth of debt in the MakerDAO stablecoin known as Dai (DAI), which was returned.

“We are also able to certify that the assets were transferred without delay onto a wallet that is managed by the permitted third party, as the court ruling requested.” It is stated in the blog post that “we do not maintain any control or access to these assets.”

The company underlined that it was “only conceivable owing to a previously undiscovered weakness in the architecture of the admin multisig access,” in reference to the negative ramifications of Oasis being able to collect crypto assets from its user vaults.

According to the publication, a vulnerability of this kind had been brought to light earlier this month by hackers wearing white hats.

We would like to emphasize that this access was implemented with the express purpose of safeguarding user assets in the case of a possible attack, and that it would have enabled us to respond rapidly in order to fix any vulnerabilities that were brought to our attention. It is important to emphasize that the assets of the users have never been in danger of being accessed by an unauthorized third party, neither in the past nor in the present.


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The DeFi space is on a path of steady recovery as good actors

The harm that was inflicted by the collapse of major cryptocurrency ecosystems in the previous year is on its way to making a gradual comeback as positive actors take aggressive initiatives to reestablish investors’ faith. Principal participants from the ecosystem of decentralized finance (DeFi) got together to discuss the benefits of running trustless, interoperable, and permissionless systems.

Over thirty DeFi protocols participated in an endeavor to “permissionlessly” distribute tweets from other protocols for a period of twenty-four hours, beginning on February 6 and continuing until February 7. This served to showcase the permissionless and interoperable nature of Web3.

This campaign has contributions from a number of different projects, some of which include, MakerDAO, SushiSwap, and Aave.

Despite the fact that DeFi has gained widespread recognition and big institutions have made their entry into the field, its image is still fragile owing to the numerous exploits that it has participated in.

The chief marketing officer of MakerDAO, Mamun Rashid, said that in order to fulfill the “full potential” of DeFi, there has to be a partnership between the ideas and the talent that is present in the field.

“By working together, we will be able to push the limits of conventional banking and create a financial system that is more welcoming and accessible thanks to decentralized money.”

The “spirit” of DeFi was characterized as a more collaborative environment, rather than a more competitive one, by the projects that were working together on the campaign.

According to Jared Grey, CEO of SushiSwap, the goal of the construction of DeFi is to disrupt the status quo of recognized financial frameworks, which have traditionally been known to impose hurdles and decrease economic freedom.

“By using the modularity of this cutting-edge technology, we are able to democratize the financial industry and provide tools and services that are more egalitarian, safer, and more transparent to an audience on a global scale.”

According to what Grey stated, the obligation to represent the genuine meaning of Defiantly Fiction begins in the space itself. Therefore, the initiative taken by more than 30 builders inside the area and the unity shown by those builders came at a crucial moment.

The DeFi domain has been a primary focus of adventures throughout the course of the last year. According to a study that was compiled by Beosin in 2022, the greatest number of assaults were launched against DeFi-based initiatives.

This weakness was the root cause of a 47.4% increase in security losses in 2022 when compared to the previous year’s total of $3.64 billion in losses, which came to a total.

Additional research from the industry has shown that it is reasonable to anticipate that the current trend of DeFi exploits will continue into this year owing to the introduction of new products to the market and the development of more skilled cybercriminals.

According to a research published by DappRadar, despite this, the industry saw strong growth to begin the year. To encourage more people to use DeFi and Cosmos, the company Injective established a new ecosystem fund in the amount of $150 million in January.


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DeFi TVL Rebounds to the $54 Billion Mark, Eth-based MakerDAO Remains Dominant Lender

Fresh data from tracking service DeFi Llama shows that the total value locked (TVL) in decentralized finance (DeFi) protocols has rebounded to the $54 billion mark.

According to the data, the total TVL was down — between $53.7 and $53.29 billion — since October 12. In September, the TVL was down to $52.22 billion, the lowest since March 2022.

Source: DefiLlama

As per the data, the largest DeFi lending platform across all chains remains the Ethereum-based MakerDAO, with a market dominance of 14.48% and $7.83 billion TVL. Lido is the second most dominant DeFi lender with a market cap of $6.11 billion, while the third is Curve Finance with $5.92 billion, Aave comes fourth with $5.19 billion, and Uniswap is fifth with $4.97 billion.

As it can be seen in the data, the value locked in Ethereum remains the largest, with around $31.2 billion, or just over 57% of the aggregate value locked today. Ethereum is followed by Tron’s $5.54 billion, Binance Smart Chain (BSC)’s $5.33 billion, and Avalanche’s $1.41 billion, among other DeFi protocols.

In simple terms, TVL measures the total value of all assets locked into DeFi protocols. TVL includes all the tokens deposited in all the functions that DeFi protocols offer, including staking, lending, and liquidity pools. In other words, the TVL is a measure of the funds deposited in smart contracts, and this figure is closely monitored by analysts as an indicator of investor confidence in the market.

Over the last two years, the cryptocurrency sector recorded a dramatic increase in the total value locked (TVL) across all DeFi platforms because of the boom associated with the bull market that attracted massive capital during that time. But all that changed in 2022.

As of March this year, the value locked in DeFi traded above the $200 billion mark. But things started turning worse in May amid a wider sell-off in global markets and waning interest in risky assets, such as cryptocurrencies. The total value locked in the crypto market declined from $160 billion in mid-April 2022 to $52.2 billion in September 2022, the lowest level since March 2022.

Image source: Shutterstock


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Stablecoin Issuer MakerDAO Invests $500m into U.S Treasuries & Corporate Bonds

MakerDAO, a decentralized autonomous organization (DAO) tasked with the governance and issuance of stablecoin DAI, on Thursday allocated $500 million for investment in U.S. short treasuries and corporate bonds.

According to the announcement, the strategic investment will see 80% of its overcollateralized stablecoin DAI converted into U.S. short-term Treasuries and the remaining 20% invested into corporate bonds. The move aims to diversify MakerDAO’s balance sheet into scalable traditional finance investments, expanding revenue streams and limiting exposure to any one asset.

European wholesale lender Monetalis is acting as the advisor, while digital asset bank Sygnum is the lead partner in the $500 million diversification effort.

In June, MakerDAO voted on a proposal aimed at helping it weather the bear market and use untapped reserves by investing 500 million DAI stablecoins into a combination of US treasuries and corporate bonds. The largest delegates in MakerDAO voted for the 80/20 split allocation. They reasoned that the allocation would be beneficial for the Maker protocol in the long term in many ways, including its new exposure to major traditional financial institutions and learning to manage finances in a bear market.

The DAO’s decision to invest such a huge amount of funds was based on recommendations by several members who believed that deploying the unused funds could help boost the protocol’s profitability with minimal risk.

The development signals a strategy by a major digital asset firm to move beyond the crypto landscape and earn yield from traditional “safe” financial investments with its flagship cryptocurrency DAI stablecoin.

MakerDAO is the governing body of the Maker protocol, and Dai is a decentralized, collateral-backed stablecoin on the Ethereum blockchain. The Maker protocol leverages Ethereum smart contracts to automate the collateralization and lending of its stablecoin (DAI), as well as provide other functionalities of other cryptocurrencies.

The development is a good example of decentralized governance participation to give more stability to the tainted algorithmic stablecoins. In May, Terra UST stablecoin, which was the fourth-largest stablecoin on the market during that time, crashed, wiping out investors globally. Besides wrecking investors, Terra’s destruction renewed scrutiny of the entire stablecoin and crypto space.

Image source: Shutterstock


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Users Panic as Nexo Withdraws 7,758.8 WBTC from MakerDAO

There has been panic in the digital space amidst rumors of Nexo being insolvent due to the abrupt withdrawal of Wrapped Bitcoin (WBTC) from MakerDAO with an address labeled as Nexo Ox8fd.


This comes just a few days after market analysts predicted a 50% drop in the price of Nexo.

According to reports gotten from sources, approximately $151 million worth of WBTC was withdrawn on Friday from MakerDAO from the Nexo wallet. 

While many users believe the sudden withdrawal is a fraudulent move by the company, a Nexo spokesperson has highlighted that the withdrawn funds are still in the public space (Nexo wallet) adding that; 

“the withdrawal was a routine transaction and represents a loan repayment according to the latest market dynamics and the company’s normal asset management.” 

Nexo has continued to provide professional financial services to the digital economy since 2018. Nexo is among the world’s most trusted financial institutions that provides lending services in the digital finance industry. According to the firm, it has more than 5 million users around the world transacting with about 40 fiat currencies across more than 200 jurisdictions.

Crisis in the Digital Assets Economy

The recent uproar comes after a number of recent crypto bankruptcies have left investors without access to their funds this year. Nexo customers are seriously in dismay considering that Celsius Network which offers a similar offering to Nexo filed for bankruptcy after freezing customers’ accounts in June.

About eight states in the United States had earlier in September filed proceedings against Nexo as regards registration and cryptocurrency products yielding interests.

According to state regulators in New York, Kentucky, California, Maryland, Oklahoma, South Carolina, Washington, and Vermont, Nexo offered users accounts earning interests without registering them as securities and without providing required information. 

Investors, according to state regulators, cannot make informed investment decisions without access to these financial statements.

Image source: Shutterstock


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MakerDAO Intends to Depeg DAI from USDC

Announcing through Discord, MakerDAO’s founder Rune Christensen revealed that the DeFi protocol might consider depegging its native token DAI from stablecoin USD Coin (USDC).


Christensen pointed out:

“Will be discussing it at tonight’s call but I think we should seriously consider preparing to depeg from USD … it is almost inevitable that it will happen and it is only realistic to do with huge amounts of preparation.”

This decision might have been reached based on tornado sanctions, given that MakerDAO might replace USDC as collateral with Ethereum (ETH).

Christensen added:

“I have been doing more research into the consequences of the TC sanction and unfortunately it is a lot more serious than I first thought.”

Tornado Cash, a popular crypto mixing platform, was recently slapped with sanctions by the United States Treasury Department based on accusations of facilitating money laundering for hacker groups like the North Korean government-sponsored Lazarus Group, Blockchain.News reported. 

MakerDAO’s consideration of jumping on the Ethereum bandwagon was revealed by core developer Banteg who tweeted:

“MakerDAO is considering a $3.5 billion ETH market buy, converting all USDC from the peg stability module into ETH.”

Therefore, this will mean that Ethereum will back more than half of DAI stablecoins.

Nevertheless, Ethereum founder Vitalik Buterin reiterated that caution was not to be thrown to the wind because this was a risky affair. He stated:

“Errr this seems like a risky and terrible idea. If ETH drops a lot, value of collateral would go way down but CDPs would not get liquidated, so the whole system would risk becoming a fractional reserve.”

The MakerDAO was also not contented with this decision because it deemed it another Terra in the making, given that Terraform made the miscalculation of backing its native token UST with Bitcoin (BTC) as the LUNA crash continued. 

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Argentinians Seek Shelter in Stablecoins after Economy Minister Resignation

Argentinians have taken refuge in stablecoins after the nation’s economy minister Martin Guzman resigned over the weekend attributed to the financial crisis crushing the South American country, reports said.

Due to the continuous inflation, Devaluation continues to undermine the Argentine peso (ARS). Three leading crypto exchanges have seen a trend where consumers are looking for hedges, for instance, the peso depreciated by nearly 15% against various stablecoins like Tether (USDT) and MakerDAO (DAI) on leading local crypto exchanges after Guzman resigned. 

Therefore, according to reports, Argentinians purchase stablecoins two to three times more than is the case on a typical weekend. Per the report:

“Argentine exchange Buenbit recorded a 300% increase in trading on Sunday compared to the same day in previous weeks.”

Sebastian Serrano, the CEO of cryptocurrency exchange Ripio, noted that Argentinians have resorted to the crypto market if uncertain news emerges. Serrano added:

“Whenever there is one of these news stories in Argentina, because of the 24/7 nature of crypto, it is the first market where Argentina starts to look for a price for the U.S. dollar. This drives volumes up.” 

With inflation hitting 60% on a year-over-year basis, Guzman’s resignation was fuelled by the lack of a precise economic direction as differences between the president and vice president took centre stage. 

As a result, Argentinians have been seeking shelter in digital assets despite the nation recently halting crypto operations undertaken by financial institutions. 

Depending on different regulations, crypto usage is speculated to continue rising in Argentina because cryptocurrency is deemed a hedge against a cyclical economic crisis that includes hyperinflation, recession, and repeated currency devaluations.

Image source: Shutterstock


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MakerDAO Adds Layer-2 Network StarkNet to Address DAI Transaction Costs

MakerDAO, a major DeFi protocol and the creator of the DAI stablecoin cryptocurrency, announced on Wednesday that it has integrated StarkNet, an Ethereum Layer 2 network (a scaling solution), on its platform.

With the integration, MakerDAO said that StarkNet would enhance the multichain capabilities of its dollar-pegged stablecoin DAI and the related functions of Maker Vaults to reduce transaction costs and improve throughput speed on its platform. Maker Vaults is a core component of the Maker Protocol, which helps to facilitate the generation of Dai stablecoin against locked up collateral.

Ethereum’s higher price gas fees have been a nightmare and have driven more activities and users to other blockchains. MakerDAO stated that the deployment of StarkNet, the zero-knowledge (ZK) side chain, will help address the cost and congestion of its native Ethereum environment by bridging to a cheaper and faster network on this platform.  

The rollout, which is planned to start on April 28, is expected to take place in four phases. The deployment is expected to become fully operational in the third quarter of this year (between July to September) as highlighted in the protocol’s roadmap.

Louis Baudoin, the core unit facilitator at StarkNet engineering, talked about the development and said, “as we see unsustainable gas fees drive more activity and users to a wider variety of blockchains, security challenges that come with bridging will continue to grow.”

He further elaborated: “Projects must move on to Layer-2 to continue to serve users, and MakerDAO is partnering with StarkNet to do exactly that. With this strategy, we are positioned to cement the Maker’s Protocol’s position as the leading decentralised lending protocol in the industry and the status of DAI as the most decentralised, secure stablecoin.”

Unlocking Global Financial Access to All

Founded in 2014 by Danish entrepreneur Rune Christensen, MakerDAO was formed to govern and maintain Dai stablecoin cryptocurrency.

Headquartered in Santa Cruz, California, the decentralised autonomous organization (DAO) is made of the owners of its governance token, MKR, who may vote on changes to certain parameters in its smart contracts to ensure stability Dai whose value is pegged to USD.

Anyone can use MakerDAO platform to open a Vault, lock in collateral such as ETH (Ether), Basic Attention Token (BAT), Wrapped Bitcoin, and USD Coin, and generate Dai as debt against that collateral. The decentralised finance platform enables borrowers to use volatile crypto coins as collateral for loans of stablecoins (called Dai) pegged to the U.S dollar. 

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