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MakerDAO Passes Proposal To Deploy $100 Million USDC In Yearn Finance Vault

In the hopes of generating yield while offering users what its best known for, MakerDAO, the issuer of the Ethereum-based stablecoin, DAI, has approved a proposal to deploy $100 million of Circle’s USD Coin (USDC) in a Yearn Finance yield-generating account called a “vault.”

The proposal, submitted on January 9, aims to look for a way MakerDAO could split its treasury allocations and earn yield.

MakerDAO To Generate Yields From Yearn Finance Vault

Following the approval of the MIP92 (Maker Improvement Proposal 92), MakerDAO plans to begin depositing $100 million USDC to the Yearn finance vault to earn a 2% yield annually, approximately $2 million every year on its YearnFi investment. 

Founded by prominent DeFi developer Andre Cronje, Yearn finance is a yield aggregator built on the Ethereum blockchain, allowing users to deposit crypto assets in the service in exchange for yield or interest over some time. 

With a total of 95,666.284 of Maker’s native token, MKR cast in the vote, approximately 68,462 MKR, which accounts for 71.56%, voted in favor of deploying USDC in Yearn Finance, while 27,204 MKR, which accounts for 28.44% voted out the whole idea and 0.0% voted “abstain.”

Though the MIP92 has been passed, the proposal still has to go through an executive vote for the concept to be implemented.

MakerDAO Attraction To USDC

Before the MIP92 submission, MakerDAO had already demonstrated interest in Circle’s dollar-backed token, USDC. Late last year, the DAI stablecoin operator invested a hefty amount alongside collaboration with Coinbase to become the largest stakeholder in USDC.

As reported by NewsBTC, MakerDAO and Coinbase Prime have a total of USD 1.6 billion in custody, allowing both partners to earn 1.5% returns from the deposited assets. Notably, stablecoins have seen rapid growth in recognition in recent years. As a result, investors now rely on these assets to protect the value of their investments.

Unlike traditional cryptocurrencies, which fluctuate now and then, stablecoins are tied to the value of an underlying asset, like the U.S. dollar. Due to the nature of stablecoins, many investors have found them enticing, especially as a vital part of future finance.

With the USDC still lagging behind USDT in adoption, the goal has always been to surpass the latter and become number one in the market cap.

MKRUSDT price chart on TradingView

Veering back to MakerDAO, the protocol’s native token, MKR, has also been thriving to cover the gaps between its current price and its all-time high. Over the past 30 days, MKR has surged more than 20% and currently trades above $650 with a 24-hour trading volume of $22.3 million.

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Whales Accumulate $726 Million In Bitcoin, Report Shows

Bitcoin and the crypto market have been of late seeing most prices of crypto in red, with little hope for an uptrend, at least based on charts. The past few weeks have seen growing fear and doubt about the asset class.

However, despite the recent trend in the market, the primary crypto asset, Bitcoin, is recording an increase in whale transactions. The big shots have gathered more BTC in the past fortnight, valued at hundreds of millions of dollars.

Bitcoin Gets Massive Whale Accumulation

According to data from Santiment, a crypto analytics firm, whales have accumulated more Bitcoin tokens over the past nine days. It noted that the value of the crypto is worth over $726 million in the current market exchange rate.

Santiment reported that Bitcoin’s addresses holding between 100 to 10,000 BTC tokens are still purchasing more. Furthermore, the firm mentioned that these addresses had witnessed rapid growth over the three weeks.

The analytics company cited that about 159 new addresses have been holding between 100 to 10,000 BTC over the last three weeks. According to the data, this is the fastest growth such addresses have experienced in 10 months.

A swing in the addresses could be linked to FUD (fear, uncertainty and doubt) brought about by the ongoing Russia-Ukraine war.

At the time of writing, Bitcoin is trading at $16,745. Its market cap is $326.65 billion, and its dominance over altcoins is 39.64%.

Whales Accumulate $726 Million In Bitcoin, Report Shows

Whales Pick Top Stablecoins

The analytics firm noted that stablecoins had also caught the whales’ interest. As a result, they are buying the top stablecoins, which include USDT, DAI, and BUSD.

Whales Accumulate $726 Million In Bitcoin, Report Shows

Santiment mentioned that the whales’ addresses that picked on Tether (USDT) and Binance USD (BUSD) have coins worth between $100,000 and $10 million. It gave a combined purchase of about $922.4 million for the two stablecoins by the whales within the past three days.

On separate records, Tether’s top addresses have accumulated a collective value of $817.5 million USDT coins. The deal represents more than a 7% surge in their holdings before December 10, 2022.

For Binance USD (BUSD), the key addresses accumulated a collective value of $104.9 million for the coin. This is a significant buying power within the past three days. Moreover, it represents a 9% increase in their holdings before December 10, 2022.

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New Study Reveals Best Stablecoin, Why DAI Took The Crown

Decentralized stablecoin DAI, native to Maker protocol, might become a major leader in the sector over the coming years. The digital asset was the most stable of the stablecoin in a period of 9 months, according to research published by Best Brokers.

A stablecoin is a digital asset whose value is pegged to the U.S. dollar in a 1:1 parity. The concept is controversial in the crypto industry, as some of the most popular and valuable stablecoins have de-pegged and become unstable at some point except for those tokens considered “too centralized” by the community.

Users have been looking for a decentralized stablecoin for years, and with the failed Terra ecosystem, DAI might take this place and take over market share from the largest stablecoins, Tether (USDT) and USD Coin (USDC).

ETH’s price moving sideways on the 4-hour chart. Source: ETHUSDT Tradingview
DAI More Stable Than Any Other Stablecoin

The study used data from Dune Analytics and explore popular stablecoins BUSD, DAI, FRAX, LUSD, USDC, and USDT. The research concluded that FRAX saw the least price deviation over the past 9 months.

The digital asset was stable at 99.75% of these periods, followed by DAI at 95.73%, and USDC at 99.72%. LUSD was the most unstable with a 0.5% deviation from its $1 peg at 53% of the 9-month period.

Of the stablecoins in the study, DAI, BUSD, and USDC have never deviated below $0.995 to the downside and $1.005 to the upside. As seen in the chart below, Tether (USDT) was the largest stablecoin with the largest percentage in price deviation over the past 9 months at 0.78%.

Source: BestBrokers

However, DAI took the top spot in the least deviation percentage from its peg. The decentralized stablecoin fluctuated 0.5% from its normal value, 0.27% of the 9 months probed by the study.

Thus, DAI is the steadiest stablecoin deviating to only $0.99640185 of its 1:1 value with the U.S. dollar. USDC closely follows in the second place with a $0.9962163333 deviation. Tether showed the worst performance in the research with a deviation of $0.97, as seen in the chart below.

Source: BestBrokers

Alan Goldberg, market analyst at BestBroker, stated the following on their results, and DAI’s potential to attract institutions purely based on its stability:

DAI’s stability is considerable. A lot of corporate adopters would prefer having assets that aren’t volatile as they already have to deal with competition, inflation, market conditions, etc. Having that in mind makes DAI very serious competition to the likes of USDC.

Stablecoins have been a controversial topic in crypto since the collapse of LUNA and TerraUSDT. However, the demand for a decentralized stable medium of exchange remains high with DAI poised to continue gaining relevance in this sector. Goldberg added:

Although the DAI’s supply is low, compared to USDC, USDT and BUSD, it is still sizeable and makes it usable by big companies. When we consider both the low deviation and the most stable price, DAI can be considered as the most stable coin for the last 9 months and a serious contender to compete with the other ‘big’ stablecoins.