Currently, MakerDAO holds $489 million worth of GUSD in its Peg Stability Module (PSM). Image: Shutterstock
The community of MakerDAO, a decentralised finance company, is strongly in favour of keeping the stablecoin GUSD from Gemini as part of Maker's reserve. The ongoing vote is assessing the trust in Gemini, the exchange founded by the Winklevoss brothers.
The vote is on whether to maintain the GUSD limit at $500 million, reduce it to $100 million or remove it completely from the reserve, as shown on Maker's governance website.
Currently, the majority of votes, 69 percent are in favour of maintaining the GUSD limit at $500 million, while 31 percent voted for completely removing GUSD from the reserve. The outcome may change as the voting will end on Thursday at 16:15 UTC.
The Maker protocol is controlled by a decentralised autonomous organisation (DAO), where individuals holding the governance token (MKR) can vote on proposals.
Currently, MakerDAO holds $489 million worth of GUSD in its Peg Stability Module (PSM), which acts as a reserve system with $7 billion worth of assets to support the value and fixed exchange rate of its stablecoin DAI against the U.S. dollar.
The voting is taking place as Gemini, the creator of GUSD, is facing challenges after it stopped customers from withdrawing funds from its Gemini Earn interest-bearing product and is being sued by the leading U.S. securities regulator.
Gemini is owned by well-known crypto investors Cameron and Tyler Winklevoss, who still lead the company. Investors in crypto are concerned that the issues at Gemini may destabilise GUSD, which in turn could cause turmoil in Maker's $5 billion DAI.
Currently, MakerDAO holds a large majority (85 percent) of all GUSD in circulation, which makes GUSD heavily dependent on its relationship with MakerDAO.
Furthermore, there are concerns about GUSD's value being supported by cash held at Silvergate Capital, a bank that specialises in serving the crypto industry, which has been affected by recent crypto market events, especially FTX's downfall.
Silvergate Capital's shares have decreased by 88 percent in the past year on the New York Stock Exchange.
Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist.
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