Gemini Uses MakerDAO to Promote Use of Its GUSD Stablecoin

GUSD in MakerDAO PSM

Tyler Winklevoss, the co-founder of Gemini, presented the plan on Thursday and included a three-month marketing incentives schedule. Dune Analytics dashboard states that the initiative intends to boost the quantity of the Gemini dollar sum in the MakerDAO PSM (Peg Stability Module), which is now at approximately $24 million. By exchanging any MakerDAO-accepted collateral, users can mint DAI using the peg stability module. The PSM helps preserve DAI's peg to the dollar.

The plan indicates that Gemini would pay a fixed interest annually of 1.25% on the whole amount of Gemini dollar maintained in the PSM vault as part of the program. The annual fixed charge would be assessed and charged monthly. The average GUSD value in the vault must be over $100 million on the last day of the month for the payment to be executed. Users are depositing GUSD to mint DAI, as evidenced by the GUSD volume in the vault reaching $100 million.

Know-Your-Customer (KYC) Verification

According to the plan, Gemini would pay MakerDAO in GUSD every month for three months. Maker would have to establish a new organization for this incentive. Additionally, know-your-customer (KYC) verification procedures would be required of the Maker entity. The administration of MakerDAO could also decide to transfer the funds from this company to its treasury.

However, the GUSD-PSM vault's management would remain unchanged by this incentive program. As a result, Gemini would not transfer the GUSD from the PSM vault on its network.

Winklevoss Proposal

The Winklevoss proposal presented the plan as an experiment. Gemini says it would determine whether or not to maintain its relationship once it reviews the procedure's outcome. A vote of the Maker governance system must approve or reject Gemini's original suggestion. If the DAO accepts the proposal, Maker would have the chance to generate a return on its balance sheet.