MakerDAO votes to decrease GUSD held in DAI stablecoin reserve

MakerDAO, a decentralized lending platform and DAI stablecoin issuer may soon sell $390 million of the Gemini Dollar (GUSD) stablecoin issued by the Gemini cryptocurrency exchange.

The Peg Stability Module (PSM) being voted on by the MakerDAO’s community, would reduce the maximum amount of GUSD from $500 million held in Maker’s DAI stablecoin reserve to just $110 million.

At press time about 94% of those who had cast their ballots, with less than 24 hours until the vote’s conclusion, support the proposal to lower GUSD.

GUSD’s future

Given that Maker controls about 88% of the stablecoin’s $568 million circulating supply, the vote will significantly impact the future of GUSD, whose metrics have been relatively stable. Maker supports the $4.5 billion DAI’s value by holding cryptocurrencies like Circle’s USDC and GUSD in its reserve and making investments in physical assets like bonds.

MakerDAO receives a 2% annual reward from Gemini for using the token as a reserve asset. Gemini is the issuer of GUSD. However, the proposal argued that by investing in short-term US Treasuries, which currently offer a yield of around 5%, the platform could benefit from better revenue opportunities.

The proposal states:

“Reducing GUSD exposure could allow for better capital efficiency by deploying funds into higher revenue-generating opportunities.”

The vote to reduce GUSD from DAI’s reserve comes just days after the DAO voted to drop MakerDAO drop Pax Dollar (USDP) stablecoin from its reserves.