Higher Dai rates means more revenue for Maker

11 months ago 459

ICYMI: Check retired last month’s post connected the expanded ecosystems that Ethereum rollups are building.

Maker has had a engaged 2023. It reduced its nonstop vulnerability to USDC to just nether 10%. Instead, it is reinvesting USDC is has acquired via the PSM into off-chain assets (okay Real World Assets) that make a higher yield. It has much than $1.2bn invested into short-term treasuries from MIP65 Monetalis Clydesdale Tracker with an estimated output of 4%. More recently, connected June 1 it started earning 2.6% connected a woody to re-invest $500m with Coinbase Custody. On apical of this, MakerDAO governance is successful the midst of a monolithic rate-hike run (I conjecture the Fed made it look similar truthful overmuch fun). An executive passed connected May 1 that raised the stableness interest for WBTC vaults to 4.9% and past different enforcement passed 2 weeks aboriginal that raised ETH and ETH LSD rates to arsenic precocious arsenic 1.75%. Those are tiny compared to the upcoming hikes that person already passed archetypal governance polls. These changes, which are expected to beryllium included connected the on-chain enforcement ballot aboriginal this month, would rise ETH and LSD Dai borrowing costs to 3.5% and WBTC’s to astir 6%.

Given Maker’s concern model, these higher yields connected stablecoin assets and higher involvement rates connected borrowing volition importantly summation its gross (as tin already beryllium seen by the illustration above). Some of this gross volition beryllium paid backmost to Dai holders arsenic MakerDAO governance besides plans to summation the Dai Savings Rate to 3.49%. The anticipation is that the casual output connected Dai volition support investors from fleeing DeFi to the easy, harmless and higher yields successful TradFi. The downside hazard is that borrowers wantonness Dai and spell to different recognition platforms with little (market-driven) rates.

It was a momentous week for crypto regulation. After years of dancing astir and hinting astatine enforcement, the SEC is coming aft the largest names successful crypto, Binance and Coinbase. The Binance lawsuit volition beryllium jucier, but the destiny of Coinbase volition beryllium acold much revealing for the aboriginal of crypto. The lawsuit is apt to instrumentality 2-4 years to tally its mode done the courts and the agleam lines drawn by the SEC mightiness spur authorities from Congress implicit that clip period. The lone question near is if the SEC is going to besides spell aft a DeFi protocol (presumably Uniswap).

I admit the tweet supra from the patron saint of Crypto Twitter, due to the fact that it underscores what makes blockchains and DeFi different. Now, we indispensable pass those usage cases and the aboriginal committedness to the broader governmental system.

Uniswap introduces FLAIR, a metric to measurement LP show Link
PoolTogether suit dismissed by US justice Link
Paradigm remark connected SEC’s projected redefinition of speech Link
House Republicans suggest broad crypto marketplace operation measure Link
72% of MEV searcher gross went to validators Link
Catalyst, a caller cross-chain AMM Link
Token Terminal: On-chain derivative marketplace stock Link
crvUSD onboards stETH arsenic collateral Link

The 3 transitions [Vitalik]
What’s the champion usage for crypto? Let AI fig it retired [Tyler Cown/Bloomberg]
State of L1s Q1 2023 [Peter Horton/Messari]
Moneyed JPEG’s [Joel John and Saurabh/Decentralised]
Token unlocks & escaped interval proviso shocks successful integer plus markets [Matías Andrade/Coin Metrics]
When is simply a token not a security? [Matt Levine/Bloomberg]
Solana the monolith [ceteris/Delphi Digital]

That’s it! Feedback appreciated. Just deed reply. Written successful a Nashville earlier its excessively hot.

Dose of DeFi is written by Chris Powers, with assistance from Denis Suslov and Financial Content Lab. All contented is for informational purposes and is not intended arsenic concern advice.

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