Tyler Winklevoss, co-founder of Gemini, published a “marketing incentive” proposal on September 29th to encourage adoption of GUSD stablecoin through a three-month strategic planning.
Tyler Winklevoss proposes that Gemini pay monthly fixed annual interest at 1.25% on all GUSD held in MakerDAO PSM vaults. This is provided that the monthly average monthly balance remains below 100 million GUSD at the end of each month.
“As we want GUSD usage on-chain to increase, we propose that this marketing incentive be limited to those months where the average GUSD balance in the PSM exceeds or equals $100m.”
This is the latest attempt by the US-based exchange in trying to grow during the crypto winter. It had to lay off more than 10% of its staff recently in order to reduce costs and maintain a sustainable business model. After Binance and Circle made different business moves to promote their tokens, the company decided to increase its native stablecoin.
Binance and WazirX have recently delisted USDC and Paxos. Later, the exchange converted funds from its users into BUSD. Circle, on the other hand, announced that USDC would be expanded into five new blockchains in an effort to counter Binance’s influence.
Gemini aims to incentivize GUSD Adoption
MarkerDAO currently stores $24 million USD in the MakerDAO PSM vault. This vault allows users to mint DAI through exchanging any collateral accepted by MakerDAO. The Winklevoss proposal aims to encourage GUSD adoption by increasing GUSD deposits in order to mint DAI.
MakerDAO will have to open a new KYC compliant account in Gemini to allow GUSD to be credited.
Gemini will not hold GUSDs that were minted in MakerDAO vaults to prevent disruptions in DAO administration. However, they should not move from MakerDAO PSM vaults.
“We are aware of the importance and value of the PSM for DAI redemptions, and we believe that keeping it on-chain will be the best way to accomplish that task.”
Winklevoss concluded the statement by stating that, if everything goes well at December’s end, after reviewing the proposal, it may be possible to renew it for the new year. This is a testament to Gemini’s commitment to increasing adoption of its stablecoin.
The MakerDAO Community Responds positively to the Proposal
The Winklevoss proposal has been well received on MakerDAO. ADCV, a member MakerDAO’s Strategic Finance Core Unit posted a chart showing why Gemini offers a compelling incentive to keep as much PSM in GUSD.
Source: MarkerDAO Forum
TrueMaker, a protocol delegate recognized by the Protocol Association, also said that this proposal was great and that all PSM pairs should follow the same approach in the future. PSM, MakerDAO’s decentralized currency, helps to maintain DAI’s 1:1 parity against the U.S. dollar.
MakerDAO says DAI is always over-collateralized and that “Maker Vaults always possess more USD in collateral than any DAI in circulation.” Gemini’s proposal would allow the protocol to profit from one its most important features, which has so far prevented it from de-pegging to the U.S. dollar.
2 Dai is always too-collateralized.
The over-collateralization is a feature for the health of the entire Maker Protocol system and the stability of Dai.
Maker vaults have always had more USD in collateral that all Dai in circulation.
— Maker (@MakerDAO), March 31, 2022
If the proposal is approved it could open the door for other stablecoin issuers to offer incentives that would both promote the adoption of their currencies as well as the stability and improvement in the protocol.
CryptoPotato’s first post, Gemini Taps MakerDAO to Boost Adoption Of Its GUSD Stablecoin, appeared first on CryptoPotato.
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