Leading DeFi platform Maker said it aims to lower USDC exposure by adding more stETH (Staked ETH) to its vault.
The move comes in the wake of the USDC issuer Centre blacklisting 38 addresses following Tornado Cash sanctions. However, this act of censorship didn’t go down well with the broader crypto community, which explains Maker’s decision to reduce the stablecoin influence.
In its attempt to lower centralized stablecoin reliance, Maker has now doubled its stETH-specific debt ceiling, post a successful governance proposal. While Maker has been contemplating this move for quite some time now, doubling the debt ceiling is the latest step towards making its stablecoin DAI truly decentralized.
Previously, USDC tokens were the primary collateral for DAI, another stablecoin. However, Maker now wants to lower centralized exposure. For that, the debt ceiling concerning stETH has now been raised to $200 million. This means that Maker will be able to get $200 million worth of staked ETH to back its DAI.
Since the ceiling rejig, almost $49 million in stETH entered Maker’s vault. However, the best part here is that stETH does not attract any stability fee. This means users locking their ETH to provide stETH will not have to pay anything to Maker. This, in turn, creates “Free DAI” for everyone holding stETH positions on Maker—making the process highly incentivized.