MakerDAO DAI/USD transferred $250 million, half of the $500 million it holds, from its Coinbase COIN custody account to DAI’s peg stability module (PSM).
The goal is to protect the peg for its DAI stablecoin, as reported by Blockworks.
PSM is a collateral pool that lets users mint USDC for DAI 1:1 and arbitrage DAI back to its dollar peg.
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DAI’s USDC reserves are required to be above at least $200 million to consider it safe. The reserves dropped below $60 million on Tuesday morning, just when Maker’s manager transferred half of its holdings.
If the reserves are emptied, the DAI price would move above or below a dollar.
MakerDAO, which runs on Ethereum with DAI as a stablecoin, keeps its value close to USD through a system of decentralized participants incentivized by smart contracts to perform maintenance and governance functions.
Monetalis CEO Allan Pedersen said that PSM funds had dropped below $300 million, and this should lead to a transfer from Maker’s account.
Monetalis also contacted the Society for Human Resource Management (SHRM) about the forum post.
Blockworks reports citing close sources to the matter that larger transfers out of the PSM seemed to be going toward centralized exchanges.
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Pedersen wrote on Maker’s forum that the teams are working to automate the PSM using smart contracts, “but, for now, the instruction-based automation using trustees, administrators, legal structures and banks/central exchanges is safe and stable.”
In March, MakerDAO members voted against diversifying its primary reserve stablecoin asset backing its DAI token and chose to keep Circle’s USDC despite the token witnessing a significant drop.