Coinbase launches USDC institutional rewards program with MakerDAO

TLDR: Today, the MakerDAO community approved a Coinbase proposal that will allow them to earn rewards on their treasury holdings of USDC. For Coinbase, this expands our USDC rewards program to an institutional client for the first time, reinforcing our commitment to USDC as a key component of a new financial paradigm.

By Coinbase

Product

, October 24, 2022

Coinbase Institutional Blog Header.png

Today, the MakerDAO community voted to approve our proposal to custody up to $1.6 billion USDC with Coinbase Prime. MakerDAO will earn a 1.5% reward on its USDC, while holding funds with a leading institutional custodian. All the while, those funds will be kept safe, secure, and accessible 24/7/365 to the DAO Peg Stability Module.

In addition to the tangible benefits for the MakerDAO community, this initiative demonstrates our commitment towards the growth of the overall stablecoin ecosystem and empowering the DeFi community and its users. As co-founders of the Centre Consortium, we powered the launch of USDC and remain committed to supporting USDC initiatives as a core bridge between crypto and fiat. 

Growing USDC under custody with expanded institutional rewards

Coinbase believes stablecoins will be part of the solution for creating an open financial system that is both more efficient and more equitable. We co-founded Centre to invest in the creation of USDC, and since then, it has become the second largest stablecoin by market capitalization. We firmly believe that USDC will be a key component of a new financial paradigm, as it helps to bridge the gap between the worlds of crypto and fiat.

As the largest single holder of USDC, MakerDAO was a natural partner to launch an institutional rewards pilot program, expanding our USDC product suite and the USDC ecosystem. 

Jennifer Senhaji, Growth & Business Development, MakerDAO, said: “This proposed collaboration with Coinbase follows an approved signal of intent by the MakerDAO community to increasingly invest Maker’s collateral into short-term bonds. It was agreed that any collateral deployed should meet the criteria of offering safety, cost structure, and flexibility. Coinbase is uniquely situated to offer a USDC Rewards Program that fulfills these criteria. In addition to Coinbase’s established reputation, it has been a longstanding partner of MakerDAO. The additional monthly revenue generated through this deal enables Maker to further advance its overarching mission to create a global, trustless financial future built on decentralized rails.”

This partnership also solidifies our position as the leading choice for USDC holders, significantly growing the amount of USDC held on behalf of customers, which was approximately $1.7 billion as of Q2 2022. In addition to the custody of USDC, we provide multi-chain support for trading USDC via Coinbase Exchange, as well as easy acquisition of, and one-to-one conversion between, USD and USDC on Coinbase Prime. 

Read more about our commitment to USDC

Strengthening the DeFi ecosystem

We have a long history of supporting the defi ecosystem – and MakerDAO, in particular. We provided liquidity to the protocol via our USDC Bootstrapped Fund and helped with the initial listing of DAI. 

By holding USDC in custody in exchange for monthly rewards, MakerDAO will receive additional revenue to the treasury, providing flexibility that it could use to fund operations or provide incentives to attract new users. 

By custodying with Coinbase Prime, MakerDAO taps the safety and security of the leading end-to-end institutional platform for trading, custody, and financing. The Coinbase custody storage solution secures assets with a comprehensive system that combines physical security, consensus computation, and strict protocols – all designed for multi-user operations. Private keys use the best of distributed cold storage as well as advances in multiparty computation. In short, security is designed to ensure that clients are always in control of their assets.

The MakerDAO community will also receive high-touch global support and access to enterprise-grade functionality that will allow them to mint, burn, withdraw, and settle accounts using USDC, consistent with Coinbase Prime’s standard offering. 

About Coinbase Prime:

Coinbase Prime is the leading institutional prime broker platform for crypto assets, trusted by over 14,500 institutional clients.

Coinbase Prime is a fully integrated platform built specifically for institutions to support the entire transaction lifecycle including advanced multi-venue agency trade execution for 200 assets, custody for more than 300 assets, prime financing, staking and staking infrastructure, data and analytics, and reporting.

Institutions can access Coinbase Prime directly via a user interface or as an integrated platform via APIs to offer crypto related products such as ETPs and ETFs, custodial solutions, or brokerage for their institutional, private wealth, and retail clients.

To learn more about Coinbase Institutional’s solutions, including more information about Coinbase Prime, click here.

Coinbase logo

Take control of your money. Start your portfolio today and get crypto.

Sign up for a Coinbase account today and see what the world of decentralized finance can do for you.