Back in September, we wrote about MakerDAO’s decision around whether to accept an offer from Coinbase to custody $1.6 billion USDC at a 1.5% interest rate into Coinbase Prime.
As we wrote at the time:
“We’re not sure if Maker will accept Coinbase’s offer. What we are sure of is that it’s an important decision.”
Well, with the governance vote passing with 75% votes in favor, we now have our answer.
What Does This Mean For Maker?
In a lot of ways, the move makes complete sense. An additional $24 million in annual revenue is nothing to sneeze at, especially considering that most DeFi protocols are breaking even or in the red. Combine that with the relative safety of Coinbase and the fact that the USDC would otherwise be unproductively sitting around, and you have what looks like a clear win for Maker.
Not to mention, the news falls on the heels of MakerDAO’s $500 million investment into US Government bonds which marks another big step in boosting protocol growth and revenue.
Of course, not everyone in the Maker community is enthused. A loud minority of people believe Maker is taking on too many centralized counterparty risks, especially in a world where governments sanction code. To these decentralists, it’s only a matter of time until Maker is attacked, and by partnering with Coinbase and practically the US Government, they are just making an attack easier.
What About For Coinbase?
On the other hand, for Coinbase, this is a clear-cut win.
They pick up $1.6 billion for cheap, which they can use to extend the reach of USDC, and land a partnership with one of the most important DeFi protocols.
Pretty sweet deal if you ask us.
Finally, What About For DeFi?
If you are a DeFi investor, now might be a good time to pray to whoever your God is.
MakerDAOs forays into Coinbase and Bonds, while good ‘business’ moves, do nothing to boost its censorship resistance. If anything, it makes an attack more likely.
Considering that MakerDAOs stablecoin DAI is deeply embedded into DeFi, any collapse in Maker would be catastrophic for DeFi.
At this point, we just have to hope that we survive long enough for truly decentralized stablecoins to come to the market.