Gemini Proposes GUSD Adoption Push In MakerDAO Vaults
Gemini has proposed on the MakerDAO forum to increase the adoption of the Gemini dollar (GUSD) stablecoin in the latter’s ecosystem by providing a set dividend on GUSD balances held in MakerDAO vaults.
Tyler Winklevoss, the co-founder of Gemini, presented the proposal on Thursday, outlining a three-month marketing incentive scheme.
According to this Dune Analytics dashboard, the plan wants to increase the volume of the GUSD balance in the MakerDAO PSM, which is now at around $24 million. The peg stability module (PSM) enables users to mint DAI by swapping any MakerDAO-accepted collateral. The PSM is also important for keeping the DAI pegged to the US dollar.
The plan specifies that Gemini will pay a set yearly interest rate of 1.25% on the total GUSD in the PSM vault as part of the program. The annually fixed rate will be assessed and paid monthly. The payout is contingent on the average GUSD amount in the vault being more than $100 million on the last day of the month. The increase in GUSD volume in the vault to $100 million indicates that users are depositing GUSD to mint DAI.
According to the plan, Gemini will credit MakerDAO in GUSD once a month for three months. This incentive will need the formation of a new organization that will be assigned a Gemini account in order to receive payments. The Maker entity will also be subjected to know-your-customer verification procedures. MakerDAO’s governance may also elect to transfer funds from this entity to its treasury.
This incentive plan, however, will not affect the management of the GUSD-PSM vault. As a result, Gemini will not transfer GUSD custody from the PSM vault to its own platform.
“We recognize the importance of the PSM in securing Dai redemptions and we believe keeping it on-chain is the best way to fulfill that task,” the proposal stated.
The concept was presented as an experiment in the Winklevoss proposal. Gemini said it will analyze the process’s outcomes and determine whether to extend the cooperation.
To approve or reject Gemini’s original suggestion, the Maker governance system must hold a vote. If the DAO adopts the proposal, Maker will have the option to generate yield on its balance sheet.
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