Gemini Taps MakerDAO To Boost Adoption of Its GUSD Stablecoin

On September 29, Gemini co-founder Tyler Winklevoss posted a proposed “marketing incentive” on the MakerDAO forum to drive adoption of his GUSD stablecoin through a three-month strategic plan.

According to Tyler Winklevoss’ proposal, Gemini will pay a monthly fixed annual interest of 1.25% on all GUSD stored in MakerDAO PSM vaults, as long as the average monthly balance is at least 100 million GUSD by the end of month.

“As we would like to see GUSD usage increase on-chain, we are proposing that this marketing incentive only be credited if the average monthly GUSD balance on the PSM is greater than or equal to $100 million during the month.”

This would be the US-based exchange’s latest effort to grow amid the crypto winter. It recently had to let go of more than 10% of its workforce to cut costs and maintain a sustainable business model. The move to boost its native stablecoin comes after Binance and Circle announced different business moves looking to promote their own tokens.

Binance and WazirX recently delisted USDC, Paxos and TrueUSD. The exchange later converted its users’ funds into BUSD. On the other hand, Circle announced the expansion of USDC on five new blockchains to counter the effects of Binance’s influence.

Gemini seeks to incentivize GUSD adoption

MarkerDAO currently stores approximately 24 million GUSD in the MakerDAO PSM (Peg Stability Module) vault, which is responsible for allowing users to mint DAI by exchanging any type of collateral accepted by MakerDAO. Therefore, Winklevoss’ proposal aims to incentivize GUSD adoption by increasing GUSD deposits to mint DAI.

MakerDAO will need to create a new KYC compliant account on Gemini for GUSD to be credited.

GUSD minted in MakerDAO vaults will not be controlled by Gemini so as not to disrupt DAO administration; however, they must not be moved from the MakerDAO PSM vaults.

“We recognize the importance of PSM in securing DAI rescues and believe that keeping it on-chain is the best way to accomplish this task.”

Winklevoss ended the statement by noting that if all goes well at the end of December, after reviewing the proposal, it is possible to renew it for another year, demonstrating Gemini’s commitment to increasing the adoption of its stablecoin.

The MakerDAO community responds positively to the proposal

Winklevoss’ proposal is being well received on the MakerDAO forum, to the point that user ADCV, a member of MakerDAO’s Strategic Finance Core Unit, posted a chart illustrating why Gemini “is offering a very compelling incentive to keep as much of PSM in GUSD as we can.”

Gemini's proposal to increase GUSD adoption on MakerDAO's PSM
Source: MarkerDAO Forum

Similarly, TrueMaker, a renowned protocol delegate, said that this was a great proposal and that in the future, all PSM pairs should be treated equally, since PSM as a decentralized exchange of MakerDAO, helps maintain the 1:1 parity of DAI with the US dollar. .

According to MakerDAO, DAI is always over-collateralized, and “Maker Vaults always have more USD in collateral than all DAI in circulation.” Gemini’s proposal could help the protocol benefit from one of its most essential features, which has so far prevented it from delinking from the US dollar.

If the proposal is approved, it could lay the groundwork for other stablecoin issuers to propose incentives that benefit both the adoption of their coins and the stability and improvement of the protocol.


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