Maker Uses Staked Ether to Limit USDC Influence

If Maker protocol’s proposal to increase the cap to $200 million is approved, more stETH can be deposited against DAI, lessening the reliance on USDC.

In an effort to reduce its reliance on centralized stablecoins like USDC, the cryptocurrency lending platform Maker this week raised the debt ceiling on its staked ether (stETH) vault.

This revelation comes after USDC-issuer Circle blacklisted pockets addresses managed by the crypto mixer Tornado Cash because it was sanctioned by the US OFAC.

The tokens are the single-largest supply of collateral backing DAI, Maker’s native decentralized stablecoin linked to the U.S. greenback. More than 34% of all property locked on USDC are locked on Maker. 

If the proposal to improve the cap to $200 million is permitted, extra stETH might be deposited towards DAI, lessening the ability of USDC.

Data from Daistats reveals that roughly $49 million value of stETH has gone into the vault. Staked ether is a token provided to customers who lock up ether on Lido, and obtain the stETH tokens in return.

According to the information, Maker is locked with greater than 245,377 stETH. The protocol has $8.4 billion in locked worth in whole.

Worries about USDC as a managed asset have grown within the crypto sector with respect to Tornado Cash. Despite latest modifications, Maker’s collateral ratio nonetheless primarily is determined by USDC to assist DAI.

The proportion of collateral USDC makes up in Maker’s swimming pools will drop on account of lenders depositing stETH in trade for DAI. Although this transfer would deviate from USDC, given the market’s turbulence, it might be dangerous.

Compiled by Coinbold

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