The governance members of MakerDAO have unanimously approved the proposal to deposit $100 million of USDC stablecoins into the Yearn Finance vault. Accordingly, the USDC deposit will earn MakerDAO an estimated annual yield of 2%.
Community Backs Yearn Finance Deposit
The preliminary proposal, according to reports, will see MakerDAO plunge $100 million worth of USDC tokens from its reserves to a designated investment account called “vault” that Yearn Finance controls. Moreover, the vault comes with a limit of $100 million and will earn an estimated 2% yield per year for the investor, which is approximately $2 million.
The initial agreement between MakerDAO and Yearn Finance started in November 2022 after Yearn, the yield aggregator platform, initiated the deal. However, the partnership is subject to final approval, which the executive vote will determine.
In the MakerDAO’s ecosystem, the executive votes represent the final step in the governance process and are used to adopt technical revamp to the Maker Protocol. The latest development is part of MakerDAO’s strategy to generate more revenue by utilizing its treasury reserves through a partnership with centralized and decentralized platforms, which deposit funds into the account.
Last September, Coinbase proposed to MakerDAO that it should deposit $1.6 billion in USDC into its institutional reserve, which offers a yearly yield of 1.5%. Similarly, MakerDAO has previously deposited USDC stablecoins in several decentralized finance (DeFi) platforms like Aave, Idle, and Compound Finance.
Marinade Finance Moves To Boost Liquid Staking
Meanwhile, regarding the liquid staking protocol on the Solana blockchain, Marinade Finance recently announced the launch of its token incentive program to reward users who dump their Solana coins in exchange for mSOL, a liquid staking derivative.
Dubbed “Open Doors,” the program is set to give out close to 160 million marinade tokens as incentives to users in the next 12 months. According to a Twitter post by the team, the reward program aims to expand its staked amount on Solana to 40 million SOL locked in the Marinade ecosystem.
Liquid staking is becoming increasingly popular because it allows users to redeem tokens representing their staked digital assets. The tokens, in this case, are the mSOL which can be utilized in other decentralized finance (DeFi) protocols.
However, the tokens must be returned so that the original staked assets can be unlocked. As a result, users could help free up liquidity for staking platforms and generate passive incomes on the staked assets.
Meanwhile, less than 3% of SOL is used in liquid staking, as confirmed by the Marinade platform’s estimate. But, with more users adopting liquid staking, the situation is expected to change in the coming years.
The Marinade team believes further growth in the liquid staking space will significantly impact liquidity across the Solana blockchain ecosystem protocols. In addition, the team noted that investors could consider liquid staking if they cannot bear the risks of investing in other high-yield crypto products.
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