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Gemini plans to increase volume of GUSD stablecoin in MakerDAO

On September 29, Gemini proposed on the forum of MakerDAO to increase the use of the Gemini dollar (GUSD) stablecoin. It will provide a set return on the GUSD amount that is stored in MakerDAO’s vaults which also enhance the adoption of the stablecoin. Gemini co-founder Tyler Winklevoss on Thursday filed the proposal, which included a marketing incentive plan for the next three months.

According to the dashboard provided by Dune Analytics, the current value of the GUSD balance in the MakerDAO PSM is around 24 million dollars. The aim of our proposal is to increase that value. The term “PSM” refers to the “peg stability module,” which is the component that enables users to mint DAI by exchanging any collateral that is accepted by MakerDAO. The DAI’s peg to the US dollar may be effectively maintained with the help of the PSM as well.

The plan stipulates that Gemini will pay a predetermined yearly interest rate of 1.25% on the total GUSD that is stored in the PSM vault. This interest rate is part of the programme. On a monthly basis, the annualised fixed rate will be calculated, and payment will be made. 

One of the requirements for receiving the payout is for the average GUSD balance in the vault to be more than $100 million on the day when the month ends. It may be deduced from the fact that the amount of GUSD in the vault has increased to $100 million that users are depositing GUSD in order to mint DAI.

According to the plan, Gemini would credit MakerDAO in GUSD once each month for a period of three months. Because of this incentive, Maker will be required to establish a new legal business, which will then be given an account with Gemini so that it may collect the payments.

 In addition to this, the Maker company will have to go through the verification steps for getting to know their customers. The governance of MakerDAO has the option of transferring the money from the current organisation to its own treasury.

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Reporter
Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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