The extended bearish trend caused panic and massive sell-offs in the crypto space. But it seems that the industry still records progressive moves. For example, a recent report shows a new partnership between Coinbase and MakerDAO.
This collaboration aims to become the largest USDC holder. The world’s largest crypto exchange Coinbase announced the partnership.
According to the announcement, MakerDAO, the lending protocol, and Coinbase Prime, an institutional client of the exchange, will custody a total of $1.6 billion USD Coins. Also, the report disclosed that the partners would earn 1.5% returns from the assets.
Before agreeing to this collaboration, MakerDAO protocol conducted a vote which gained 75% support for the proposal.
Coinbase Excited About USDC Holding
According to the reports, Coinbase is excited about this move. The reason is that stablecoins have seen a boost in recognition recently. As a result, investors now rely on these assets to protect the value of their investments.
When other crypto prices fluctuate sporadically, stablecoins remain stable without depegging. Cases of depegs have been recorded in the past. But they only occurred on specific occasions, such as the general market crash of 2022.
Due to the nature of these cryptos, many investors see them as an essential part of future finance. For a stablecoin such as USDC, the goal is to become the number one, overtaking USDT in market cap. As a result, it has continued to gain, covering the gap between its value and that of Tether USDT.
How Is COIN Stock And MakerDAO Token performing Now?
While Coinbase continues to expand its crypto-related activities, investors wonder if its stock COIN is reacting positively.
Unfortunately, the stock mirrors the general trend of the 2022 bear market. There has been a correlation between the price movement of the crypto market and many tech stocks.
Coinbase stock COIN traded sideways today, during the Asian trading session. The price reached $66.39 after trading hours. A trace to its November 2021 price shows that the stock lost 80% of its all-time high then.
As for MakerDAO MKR, October 25 shows a loss of 6% during the early hours of trading. But during the early hours of the Asian trading session on Tuesday, the token gained by 3.52%, pushing the price to $951.45. But tracing its all-time high price of November 21 shows a loss of 85% for MKR.
MKR trends upwards on the chart l MKRUSDT on Tradingview.com
How Will The Move Affect DAI?
As MakerDAO has become the largest holder of USDC, the protocol is recording more revenues facilitating its goals. The growth and business development lead, Jennifer Senhaji, commented on this advantage for the lending protocol.
But now, the move will affect the decentralized nature of DAI, given that a centralized stablecoin is now collateralizing it. So the step to handle this effect might be accumulating Ethereum and increasing decentralized collateral.
This plan will likely take place within the next three years, given that MakerDAO aims to make DAI free from the dollar peg in the future.
Featured image from Pixabay, Chart: TradingView.com