Proposal: GUSD PSM

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.

Maker Ecosystem

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.

Proposal Specifications

  1. 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)
  1. 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.

Useful Links


Website: Gemini dollar (GUSD) | Gemini


Source code: GitHub - gemini/dollar: Gemini dollar contract source code

GUSD token contract:

Independent accountant’s reports: Gemini dollar (GUSD) | Gemini

Trail of bits contract audit:


Thank you for bringing this proposal! Very exciting.


I couldn’t be more excited to see this in action, I see it as a new way to get FIAT through another great project.

I see a great opportunity for medium and large GEMINI users; switching their GUSD to DAI to get the benefits that the exchange provides for DAI.

Or entering first hand into the great DEFI ecosystem using DAI.

This will go a long way.


GUSD addition to PSM is valuable for diversifying counterparty risk of stablecoin issuers for Maker.

Just to confirm, based on the reviews of Gemini dollar reserve-funds, are you holding the reserves completely in cash? Do you see any risks which could be problematic for Maker from this perspective, assuming we will be holding a large share of total GUSD supply.

Currently 52% of GUSD is held by Gemini 4 address, I am curious what these funds represent.

Supply of GUSD decreased for approximately 43% since Sep 30th, is there any particular reason?

I also want to comment on proposed parameters, where I think that the 500M DAI debt ceiling might be too high based on current supply of GUSD which is at 144M. Generally speaking I think it is risky for Maker to hold the majority of supply of any asset. The signal request to set PSM fees to 0 recently passed with “yes”, assuming it also passes on-chain, the GUSD PSM fees should also be set to 0.


Good proposal and

thanks to the Growth CU.
They are doing great work and it’s important to highlight that!


Just as a point of reference for those following along, Maker holds about half of all outstanding USDP.

I agree generally that Maker should never be the market. But for PSMs, it’s mostly about how much faith we have in the redeemability.

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Hi all! Thanks very much for the responses, love to see the engagement from the Maker community! Happy to provide some context and answers on our end here.

The GUSD funds held in Gemini denominated addresses represent holdings by Gemini clients in the exchange. I would associate recent supply volatility to rising crypto prices and people looking for exposure to non-USD assets.

About the relative market size of the PSM market for GUSD, we should also consider that effectively, the largest/most liquid market will always be GUSD/USD on Gemini, as a user can mint an unlimited amount of GUSD as long as it’s backed 1:1 with USD deposited on Gemini’s bank accounts. This liquidity would affect other GUSD pairs so in practical terms Gemini will always represent the largest GUSD market. That said, the Maker risk team can probably best assess the proposed parameters or tweak some if deemed necessary - totally flexible to adjust. Given we operate under the strongest regulatory oversight, full redeemability of GUSD 1:1 with USD is our most important assurance.


PSMs can see rapid inflows and outflows depending on market conditions. If Maker takes in too large a share of a stablecoin’s supply, this could put stress on issuer redemption processes (for example if a large portion of the PSM unwinds quickly and users want to withdraw for USD).

I’d be curious to hear from Gemini folks present - is there an upper limits to how much of the GUSD supply you could redeem at any one time? Could GUSD reserves face losses if a large share of supply redeemed quickly (eg from illiquidity or duration risk in money market holdings)?


Thanks a lot for your questions @monet-supply! There is no upper limit on how much of the GUSD supply can be redeemed for USD at any one time on Gemini. There is a on-chain mint ceiling viewable in the GUSD contracts, which can be raised when required, but it is not related to USD reserves and it affects mints, not redeems.


Thank you for this Proposal.

Are you in favor of the President’s Working Group stablecoin report recommendations?

Is Gemini planning to seek a banking license?

Are there any reflections on last week’s Congressional hearings from Crypto CEOs that you’d like to share in support of or in contrast with the testimony of your peers?

Best regards,