Makerdao Issues Emergency Proposal to Address $3.1B in USDC Collateral After Stablecoin Depegging Incident

On March 11, 2023, the decentralized concern task Makerdao issued an exigency connection pursuing the USDC depegging incidental that saw the stablecoin dip down to $0.877 per unit. At the clip of writing, Makerdao commands $3.1 cardinal successful USDC collateral that backs a information of the project’s stablecoin, DAI.

Makerdao Proposes Changes to Limit Exposure to Potentially Impaired Stablecoins

Members of Makerdao person been discussing a recent exigency proposal that aims to code the $3.1 cardinal successful USDC assets the task holds arsenic collateral. The quality comes arsenic Circle Financial revealed it had funds stuck astatine the fiscal instauration Silicon Valley Bank (SVB) and the firm’s stablecoin, USDC, broke its $1 parity. Presently, USDC is changing hands for $0.91 per coin, but 5 different stablecoin assets person been affected.

Makerdao’s DAI stablecoin is down to $0.92 per coin, and the stablecoin slipped to a 24-hour debased astatine $0.881 per DAI. DAI’s unstable enactment has caused the Makerdao squad to contented an exigency connection to code the $3.1 cardinal successful USDC it holds.

“The projected changes are intended to bounds Maker’s vulnerability to perchance impaired stablecoins and different risky collateral portion maintaining capable liquidity to forestall DAI from trading importantly supra $1 if conditions alteration and ensuring determination is capable marketplace liquidity to process imaginable liquidations of crypto-collateralized vaults,” the connection states.

Further, the Makerdao connection explains the collaterals “are exposed to imaginable USDC process risk.” Additionally, Makerdao says the “proposal(s) implementing the supra changes are expected to beryllium posted successful the adjacent ~12 hours oregon less.” Makerdao is encouraging each voters to reappraisal and enactment the proposals “as soon arsenic possible.”

This isn’t the archetypal clip Makerdao has had issues with DAI’s collateral backing arsenic precisely 3 years ago, during the March 12 “Black Thursday” event, the depleting terms of ethereum (ETH) strained the stablecoin project. Estimates bespeak that astir $4 cardinal worthy of the stablecoin DAI was near underwater owed to an auction failure.

What bash you deliberation the interaction of Makerdao’s projected changes volition beryllium connected the decentralized concern abstraction and the stableness of stablecoins? Share your thoughts successful the comments below.

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