Since there is a possibility that risks could be tied to USDC, the MakerDAO Central Risk Unit recently proposed the notion of diversifying collateral for Dai. This suggestion was made in response to the proposal. Nonetheless, MKR holders voted decisively to keep USDC as the main collateral for Dai. Voting 79.02% to expand USDC minting capacity to DAI and reduce the cost to 0%, MKR holders voted to keep USDC as the primary collateral for Dai.
Due to USDC’s “possibly more dangerous exposure to uninsured bank deposits” and “weaker legal framework” compared to its rivals, the suggestion advised diversifying collateral into GUSD and USDP. However, according to the Central Risk Unit, the risks related to the use of USDC as collateral have decreased dramatically since the previous week. This information was provided by the Risk Center.
When a series of failing banks forced USDC to briefly lose its $1 peg, the decision was made to keep USDC as the main collateral for Dai transactions. In response to this, MakerDAO has made efforts to prevent Dai from being insufficiently collateralized. These actions include increasing the charge to mint Dai using USDC as collateral from 0% to 1%, as well as lowering the daily minting limit for this procedure.
A vote of confidence in the stability of the USDC stablecoin and its ability to retain its $1 peg can be inferred from the fact that USDC will continue to serve as the primary collateral for the Dai cryptocurrency. However, this raises concerns about the potential dangers that are associated with placing a significant amount of trust in a single collateral item.
New discussions and disputes over collateral diversification within decentralized autonomous organizations like MakerDAO may well continue to emerge as the cryptocurrency market continues to expand and stablecoins become more widely used.