MakerDAO Approves Deployment of $100M USDC on DeFi Protocol Yearn Finance
Decentralized finance (DeFi) giant MakerDAO’s community approved Monday a proposal to deploy up to $100 million USD Coin (USDC) from its reserve on DeFi protocol Yearn Finance, where the deposited stablecoin will earn a yield.
Read more: How Does USDC Work?
Per the decision, Maker will open an individual non-custodial vault on Yearn with a ceiling set at $100 million to deposit USDC from its Peg Stability Module (PSM), which backs the value of Maker’s decentralized stablecoin DAI.
According to the proposal submitted at the end of November last year, MakerDAO is predicted to earn a 2% annual yield with the strategy.
The maneuver is part of Maker’s strategy to earn a steady revenue stream by allocating a part of its $7 billion reserve assets to various yield-generating strategies such as partnering with Coinbase’s custody platform and investing in U.S. government bonds. DAI holders receive a 1% annual reward as a result of increased income since last month.
The move may also boost Yearn’s dwindling user activity. The protocol’s total value locked (TVL), a popular indicator to show the worth of assets deployed on a DeFi protocol, recently dropped to $442 million from an all-time high of $6.9 billion in December 2021, according to data by DefiLlama.