March 17, 2020 MakerDAO’s governance system has added USDC as a new collateral type following Maker’s recent liquidity issues.

Following the precipitous decline in the price of ETH last week that caused malfunctions in Maker’s liquidation process, the MakerDAO governance community has added USDC as a new collateral type. Last Thursday, the price of ETH dropped rapidly, leading to a $4.5 million shortfall in Maker’s collateral base. The Maker system will mint new MKR tokens this Thursday to fund this deficit. However, in recognition of its existing collateral base’s volatility—the base is composed of ETH and BAT—MKR holders voted today to add the USD-pegged stablecoin, USDC as a new collateral type, aiming to mitigate some of this volatility. The executive vote placed a 20% annual stability fee, 125% collateralization ratio, 20 million debt ceiling and 13% liquidation penalty for the new USDC vaults. The Maker community prior to the vote had discussed the implications of adding a centralized and regulated digital asset to the collateral base of what is otherwise a decentralized finance (DeFi) protocol.