Proposal: GUSD PSM
Hi to all the members of the Maker community! As we continue to boost Gemini’s support for the DeFi ecosystem on Ethereum, we’d like to propose creating a GUSD PSM that can reduce single third party risk for Maker, diversify Dai collateral and help strengthen Dai’s mission as the largest decentralized stablecoin. We have had various discussions with the Maker Growth team, whose help has been invaluable for us to define the plan ahead. We now want to share those thoughts with the community and get further feedback.
Today, Dai is 20% collateralized by USDC, with ETH being the largest collateral at ~50%. To be able to fulfil demand for Dai, the Maker community has created the Peg Stability Module, and we believe the best way to fuel that growth is to diversify the number of assets supported in it - starting with the most reputable issuers. In light of that vision, we think USDC was a good first step, and USDP is also a valuable addition to the PSM and the future of Dai. We’d like to see GUSD involved in the PSM to continue our support for the ecosystem as well.
The Gemini team has always been excited about supporting Maker and Dai in our various products.
- Custody: MKR has been supported on Gemini since August 2020, and Dai since April 2020. We have plans to also support vote delegation in the future.
- Trading: MKR trading was supported in September 2020, and Dai in May 2020.
- Earn: MKR is available in the Gemini Earn product with 2.25% APY, and Dai with one of the highest rates at 7.55% APY to our users.
- Nifty Gateway: Nifty Gateway users can use their Gemini exchange account balances to make purchases on NG. This means a Gemini exchange user who has Dai in their wallet can use it to pay on Nifty Gateway, where a conversion from to ETH or USD takes place. Plans to also support as payout currency in the near future.
- Credit Card: Customers will be able to select DAI as their reward to earn instant crypto rewards as soon as the product launches.
Our exchange is also ranked as one of the top 50 Dai holders by balance.
Gemini is a U.S. company regulated by the New York Department of Financial Services. There are no fees to mint or redeem GUSD 1:1 USD through Gemini and Gemini covers all gas costs to withdraw on-chain. Gemini dollar (GUSD) bank reserves are eligible for FDIC insurance up to $250,000 per user while custodied with State Street Bank and Trust. USD reserve audits are published monthly by an independent registered accounting firm, BPM LLP, and the Ethereum smart contract was launched in September 2018 and has been audited by Trail of Bits. This information has also been mentioned in our previous Vault collateral application on this forum here, activated shortly after. GUSD-ETH and GUSD-BTC pairs are available on Gemini.
- GUSD PSM Parameters
- Fee In (tin): 0.1%
- Fee Out (tout): 0%
- Debt Ceiling (line): 500 million DAI (50 million DAI initially, to be fully increased after launch)
- PSM Support on Gemini
On top of the aforementioned support in our product lines, Gemini will work on supporting Dai mints through the GUSD PSM. This is an exciting future where clients of one of the largest fiat to crypto exchanges will be able to access massive liquidity when buying Dai. Our plans are to:
- Support the GUSD PSM for Gemini OTC desk clients (Q1 2022)
- Support the GUSD PSM for the exchange user base (after Q1 2022)
We look forward to the community’s thoughts and feedback.
Website: Gemini dollar (GUSD) | Gemini
GUSD token contract: https://etherscan.io/token/0x056fd409e1d7a124bd7017459dfea2f387b6d5cd
Independent accountant’s reports: Gemini dollar (GUSD) | Gemini
Trail of bits contract audit: https://gemini.com/static/dollar/gemini-dollar-trailofbits-audit.pdf