The proposal by PaxosGlobal would generate up to $29 million of extra revenue annually to MakerDAO’s treasury if approved. sndr_krisztian reports
posted in Maker’s governance forum on Thursday, Paxos solicited MakerDAO to increase the maximum amount, also known as a debt ceiling, of USDP to $1.5 billion from the current $450 million in Peg Stability Module reserve system that backs the value of Maker’s DAI stablecoin.Effective Federal Funds Rate
, which stood at an annual 4.3% at the time of publication. Paxos would only pay the fee if the debt ceiling is at $1.5 billion or higher on any given day. The maximum threshold would increase to $2 billion of USDP in 2024, per the proposal. Paxos estimated that the facility would generate some $29 million of extra income annually for Maker if used at full capacity. The MakerDAO community will first discuss the proposal then put it to a vote.
USDP is a dollar-pegged stablecoin one-to-one backed by cash and cash-equivalent U.S. government debt instruments, according to independent. Both Paxos and USDP are regulated by the New York Department of Financial Services , the state’s leading financial regulatory agency. Effectively, Paxos would pass a part of the revenue earned on the government bonds backing USDP to Maker.
The proposal is part of MakerDAO’s twin effort to reduce its heavy reliance on Circle’s USDC stablecoin while boosting the protocol’s income by investing in
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