In an effort to lessen its reliance on centralized stablecoins like USDC, the cryptocurrency lending platform Maker this week raised the debt ceiling on its staked ether (stETH) vault.
This revelation comes after USDC-issuer Circle blacklisted wallet addresses controlled by the crypto mixer Tornado Cash as it was sanctioned by the US OFAC.
Also Read: Why did U.S. OFAC Sanction Tornado Cash?
The tokens are the single-largest source of collateral backing DAI, Maker’s native decentralized stablecoin linked to the U.S. dollar. More than 34% of all assets locked on USDC are locked on Maker.
If the proposal to increase the cap to $200 million is approved, more stETH can be deposited against DAI, lessening the power of USDC.
Data from Daistats reveals that approximately $49 million worth of stETH has gone into the vault. Staked ether is a token offered to users who lock up ether on Lido, and receive the stETH tokens in return.
According to the data, Maker is locked with more than 245,377 stETH. The protocol has $8.4 billion in locked value in total.
Worries about USDC as a controlled asset have grown in the crypto sector with respect to Tornado Cash. Despite recent changes, Maker’s collateral ratio still primarily depends on USDC to support DAI.
The percentage of collateral USDC makes up in Maker’s pools will drop as a result of lenders depositing stETH in exchange for DAI. Although this move would deviate from USDC, given the market’s turbulence, it could be harmful.
