Crypto Lender Maker Turns to Staked Ether to Reduce USDC Influence

The development is part of a move away from centralized crypto products such as stablecoins.

AccessTimeIconSep 13, 2022 at 2:09 p.m. UTC
Updated May 11, 2023 at 6:41 p.m. UTC

Crypto lending platform Maker, the world's largest decentralized-finance (DeFi) app, doubled the debt ceiling of its staked ether (stETH) vault this week as it looks to reduce its reliance on centralized stablecoins after Centre, the issuer of USD coin (USDC), blacklisted 38 addresses linked to sanctioned crypto tool Tornado Cash.

More than 34% of all assets locked on USDC are locked on Maker, and the tokens are the single-largest source of collateral that backs DAI, Maker’s native decentralized stablecoin pegged to the U.S. dollar. Approval of the proposal to raise the ceiling to $200 million allows more stETH to be deposited against DAI, reducing USDC’s influence.

This role of USDC in the system has led to criticism for DAI among market observers, with some even terming it “wrapped USDC” – or an alternative for USDC tokens. Erik Vorhees, the founder of crypto trading platform ShapeShift, has publicly appealed for Maker to start “unwinding its USDC collateral immediately.”

“There’s a natural tension between centralized stablecoins and projects like DAI that want to be permissionless and uncensorable,” Maker founder Rune Christensen said in a CoinDesk TV interview in August. The decision to lean on USDC allowed Maker to grow and focus on an easy user experience, but that came with trade-offs that are now fully visible, he said.

Some $49 million worth of stETH has flowed into the vault since the ceiling was raised, data from tracking service Daistats shows. Staked ether is a token supplied to users who lock up ether on Lido, a staking service, and receive the stETH tokens in return. More than 245,377 stETH is locked on Maker, the data shows. Maker has a total value locked of $8.4 billion.

The stETH vault has a 0% stability fee, meaning users don't have to pay fees to Maker on their positions. This essentially creates “free dai” for users, Maker said in a Tuesday tweet.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.