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    Home»News»MakerDAO Prepares to Limit USDC Influence with Staked Ether
    News

    MakerDAO Prepares to Limit USDC Influence with Staked Ether

    Anietie DavidBy Anietie DavidSeptember 13, 2022Updated:September 13, 2022No Comments3 Mins Read
    MakerDAO Prepares to Limit USDC Influence with Staked Ether 
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    This week, the largest decentralized-finance (DeFi) app in the world, MakerDAO, increased the debt ceiling of its staked ether (stETH) vault by twofold in an effort to lessen its reliance on centralized stablecoins in the wake of Centre, the creator of the USD coin (USDC), blacklisting 38 addresses connected to the sanctioned cryptocurrency tool Tornado Cash.

    The tokens are the single-largest source of collateral backing DAI, Maker’s native decentralized stablecoin linked to the U.S. dollar. More than 34% of all assets locked on USDC are locked on Maker. If the request to increase the cap to $200 million is approved, more stETH can be deposited against DAI, lessening the power of USDC. Market watchers have criticized DAI because of the role USDC plays in the economy; some have even referred to it as “wrapped USDC” or a substitute for USDC tokens.

    Since the ceiling was raised, data from tracking site Daistats reveals that approximately $49 million worth of stETH has gone into the vault. Users that lock up ether on Lido, a staking service, and earn the stETH tokens in exchange, are given staked ether as a reward. According to the data, Maker is locked with more than 245,377 stETH. Maker has $8.4 billion in locked value in total.

    Users don’t have to pay Maker any fees on their positions thanks to the stETH vault’s 0% stability charge. In essence, this gives users “free dai,” according to a tweet from Maker on Tuesday.

    MakerDAO Users No Longer Have to Pay for Any Fees on Their Positions

    Users of MakerDAO, the organization behind DAI, will now be able to mint the stablecoin for free. This was made possible after an executive vote increased the debt ceiling for its stETH vault to 200 million DAI.

    Free Dai minting?

    There is only one volatile-collateral vault type with a 0% Stability Fee — WSTETH-B

    The latest Executive Vote raised its Debt Ceiling to 200 million Dai, and the Dai minted from this vault type is on its way to filling the available debt, again.

    ↓ pic.twitter.com/zfLbEpDuTk

    — Maker (@MakerDAO) September 12, 2022

    The higher debt ceiling is expected to minimize its dependency on support from centralized collateral assets. As such, the governance voted on the proposal that sought to reduce the fees for six vaults. The main idea was to promote DAI mints against decentralized collateral.

    Currently, MakerDao Governance has reduced the stability fee for the Wrapped stETH vault to 0%. This essentially means that users can now mint DAI for free rather than paying fees to Maker.

    To mint against WstETH, users will have to maintain a minimum collateralization ratio of 185%. So far, 145.5 million DAI has already been minted against WstETH, with 55.5 million DAI available for minting.

    The vote comes after a push by MakerDAO Founder Rune Christensen, who aims to revise the protocol’s model and adapt to several challenges while minimizingDAI’ss reliance on USDC and real-world asset collateral over the coming years.

    Blockchain Cryptocurrency Dao DeFi MakerDAO
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    Anietie David

    Anietie has worked in the blockchain industry for three years, gaining experience in blockchain technology, cryptocurrencies, DeFi, and NFTs. As a seasoned content writer, he is passionate about creating effective content strategies for blockchain brands. In addition to content writing, he also has a strong interest in front-end development. When he's not working, he spends his time reading horror novels or playing CODM.

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