As a result of an Executive Vote held this afternoon, MKR holders have accepted USDC as a new collateral asset in the Maker Protocol. USDC, a stablecoin backed by the US Dollar, is the third collateral type approved by Maker Governance. Joining ETH and BAT, USDC can now be used to open Maker Vaults in order to generate Dai.
Prior to the vote, the Maker community discussed the merits of adding USDC, as well as the appropriate risk parameters for the token (listed below), in the Maker Governance Forum. In addition, the governance community considered in a public meeting what, if any, impact adding a centralized stablecoin as a collateral type to the protocol might have on users and the Decentralized Finance (DeFi) movement as a whole. Watch the recording of that meeting.
The governance community also debated the atypical timing of the vote, ultimately determining that by adding USDC swiftly, Dai price instability and the ongoing liquidity issues that have resulted from recent market volatility might be addressed. Importantly, the increase in Dai liquidity provided by USDC should benefit Keepers taking part in both FLIP and FLOP auctions.
Note: Liquidations are currently disabled for USDC, and the Oracle price has been fixed at $1.
The flexibility of the Maker Protocol means that almost any kind of asset that can be tokenized can be added as collateral in the system, as long as it has appropriate risk parameters and it is approved by Maker Governance. It’s exciting to add USDC to the list of collateral types, and we welcome users to lock up their USDC to generate Dai after connecting their wallet to Oasis Borrow.