• MakerDAO community voted in favor of keeping Gemini USD stablecoin as part of the protocol’s DAI stablecoin reserves.
• The poll that ended on January 19 showed 50.85% of the votes supporting keeping the GUSD debt ceiling at $500 million in Maker’s Peg Stability Module (PSM), and 49.15% supported removing it completely.
• This means MakerDAO will continue to hold 85% of all GUSD in circulation in its PSM.
The MakerDAO community recently voted in a governance poll to decide on the future of the Gemini USD stablecoin as part of the protocol’s DAI stablecoin reserves. This was in response to the liquidity crisis plaguing Gemini’s Earn program, which could have presented a major risk to MakerDAO if the decision had gone the other way.
The poll, which ended on January 19, showed 50.85% of the votes supporting keeping the GUSD debt ceiling at $500 million in Maker’s Peg Stability Module (PSM). The remaining 49.15% of the votes supported removing it completely. This means MakerDAO will continue to hold 85% of all GUSD in circulation in its PSM.
The PSM is a mechanism that allows users to mint DAI in exchange for collateral accepted by Maker. It also keeps DAI’s peg with the U.S. Dollar. The outcome of the poll therefore avoided a tragedy for GUSD and ensured MakerDAO’s exposure to Gemini would remain limited.
The concerns about GUSD stem from the $900 million Gemini Earn assets remaining locked up with Genesis, which has suspended withdrawals. Gemini is also under pressure after it halted withdrawals from its yield-generating Earn program. Further, the U.S. Securities and Exchange Commission charged the exchange for alleged unregistered securities sales.
Nevertheless, the MakerDAO community chose to maintain the GUSD debt ceiling within the PSM, which is a testament to the trust and confidence it has in the stablecoin. This decision is likely to prove beneficial not just to MakerDAO, but also to Gemini, as it will ensure the continued acceptance of GUSD within the Maker protocol.