The U.S.-based crypto exchange’s custodial arm will pay a 2.6% annual yield on deposits, a related post on Maker’s governance forum said. The proposal forbids Coinbase Custody to rehypothecate – lend, reinvest or use in other ways – the assets in the account.
Maker, one of the largest decentralized lending protocols, is led by a decentralized autonomous organization (DAO), in which holders of its native maker (MKR) token vote on proposals. The protocol also issues the $5 billion DAI stablecoin, backed by some $7 billion worth of assets in Maker’s reserves.
The latest development is part of implementing an earlier decision to transfer up to $1.6 billion USDC to Coinbase to earn yield. The platform has been pursuing a strategy to diversify its reserves and increase revenues by investing in yield-generating traditional financial assets, including U.S. Treasury bills and loans to banks.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.