MakerDAO approves the USDC as the third type of guarantee in the Maker protocol
MKR holders vote for accept USDC as collateral in Protocol Maker. ETH and BAT are two other guarantees allowed in the protocol. Maker Governance deciding essential options and features for DAI through voting accepted the USDC, and now users can deposit this stable coin to open Maker Vaults and generate DAI.
Examining the risks
Adding a new cryptocurrency to a platform as collateral includes some risks. Executives or decision-making communities must consider all possibilities and risks before adding the new currency. Although the USDC is a stable currency backed by the US dollar and does not have the typical volatility of cryptocurrencies, accepting it as collateral needs further evaluation.
The Maker community discussed the merits and risks of adding the USDC as collateral at the Maker Governance Forum. According to the MakerDAO announcement, the risks below were discussed in the community forum:
- Stability fee: 20% (annually)
- Collateralization ratio: 125%
- Debt limit: 20 million
- Settlement penalty: 13%
- Warranty Auction Lot Size: 50,000 USDC
- Minimum price change of guarantee auction: 3%
- Collateral Auction Bid Challenge Window: 6 hours
- Warranty auction maximum duration: 3 days
- Dust: 20 (Dai)
Don't forget that the stable USDC currency is a currency under the control of a centralized organization. Adding a kind of centralized to the Decentralized Finance (DeFi) movement as collateral needed more meetings and discussions. So the community even held a physical meeting to further discuss this issue.
The protocol Maker It provides a lot of flexibility so that any tokenized asset can be added as collateral to the system. But the token must first be approved by the community called Maker Governance.
How to take part
Users interested in depositing USDC and enabling Maker Vaults must first connect their wallets to the Oasis Borrow app. Oasis provides an Ethereum-based platform that users can exchange, borrow, and earn tokens using Dai on it.
Users can access Oasis through any Ethereum compatible wallet. Oasis is a free platform, but users have to pay for gas on Ethereum transactions and other Protocol Maker fees, such as stability fees. At this time, Oasis supports Dai, Ethereum, Augur, 0x, BAT, and USDC.
