MakerDAO to transfer up to $500 million in USDC to Coinbase custody for 2.6% yield

• Crypto lending protocol MakerDAO has agreed to transfer a maximum of $500M in USDC to Coinbase custody for 2.6% yield.
• The deal is part of a maneuver to move up to $1.6 billion of USDC stablecoins to Coinbase’s custody arm.
• The proposal prohibits Coinbase Custody to reassume the assets in the account.

MakerDAO, a crypto lending protocol, has agreed to set up a real-world asset (RWA) vault for Coinbase Custody and the transfer of up to $500 million in USD Coin (USDC) stablecoins. The news comes after a vote concluded on April 20.

Maker is among the largest decentralized lending protocols led by a decentralized autonomous organization (DAO). In the DAO, holders of Maker’s native MKR token are mandated to vote on proposals. The Maker protocol also issues the $5 billion DAI stablecoin, supported by around $7 billion worth of assets with the protocol’s reserves.

Based on a related announcement on Maker’s governance forum, Coinbase Custody will pay an annual yield of up to 2.6% on deposits. Further, the proposal prohibits the United States-based cryptocurrency custodial arm from reassuming or rehypothecating the assets in the account. Notably, this means Coinbase Custody cannot lend, reinvest, or use the deposit in other ways.

Accordingly, the Maker community decided after a corresponding vote that Coinbase would store the tokens in cold cryptocurrency wallets. Nevertheless, Maker will have access to withdraw funds from the vault within 24 hours. Noteworthy, “funds in cold storage are insured up to the $500 million limit.”

The development comes amid efforts to implement a previous decision to move up to $1.6 billion USDC to Coinbase for yield earning. The platform has been looking to find an approach that will see its reserves diversified and increase revenues. One of the accepted approaches entails investing in traditional financial assets that actually generate yields, including US Treasury bills and loans issued o banks.

 MakerDAO’s MKR price analysis

At the time of writing, the ticker token for the Maker ecosystem, MKR is auctioning at $717, after losing almost 2% in the last 24 hours. The altcoin has been on a downtrend since April 17 after a bullish effort was repelled by the bears at $808.

Maker price (MKR) has bent under the suppression of the Exponential Moving Averages (EMA). An increase in buying pressure from the current level could see MKR breach the immediate obstacle presented by the 50-day EMA at $716 after which it would have to face off the 100-day EMA at $727.

Further north, Maker price could tag the 200-day EMA at $782, or extend a neck higher to confront the resistance level at $808. Such a move would denote a 15% climb from the current price and could see MKR resume the bullish front that was lost on April 16.

MKR/USDT 1-day chart

On the flip side, a continued downtrend could see Maker price revisit the $655 swing low. In the dire case, MKR could fall back to the $600 zone before a retest of the $503 support floor.