The market’s largest decentralized stablecoin got a minor decentralization boost.
At press time, the amount of Circle’s USDC stablecoin backing MakerDAO’s DAI has hit 23.6%. This figure was a whopping 50% last August, sparking concerns over DAI’s centralization.
DAI is a U.S. dollar-pegged overcollateralized stablecoin, governed by the MakerDAO decentralization organization. DAI is the largest decentralized stablecoin with a market capitalization of $4.6 billion, per Coingecko, backed by cryptocurrencies like Ethereum and stablecoins, as well as so-called real-world assets.
Pigeon, Eagle, Phoenix: How Maker Will Use US Treasuries to Buy Ethereum and Boost DAI
Decrypting DeFi is Decrypt's DeFi email newsletter. (art: Grant Kempster) Maker, the project underpinning the market’s largest decentralized stablecoin DAI, is taking big strides into the world of centralized finance. Maker is tying up with firms like Coinbase, Gemini, and Coinshares, and even buying up U.S. treasuries and corporate bonds from BlackRock (yes, that BlackRock). For example, Coinbase Prime offered to pay the protocol 1.5% on a massive chunk of USDC that is currently being used as c...
Now, as its dependence on USDC wanes, those real-world assets, or RWAs, are taking up a larger portion of DAI’s backing. RWAs refer to non-crypto assets and those that are linked to real-world businesses or entities.

MakerDAO currently holds short-term U.S. government bonds worth $1.12 billion, managed and tracked by British Virgin Island-based DeFi asset manager, Monetalis Clydesdale.
After that, Gemini’s GUSD and Paxos’s USDP stablecoin account for 20.8% of DAI’s collateral share, exposing the asset to the same risks as USDC.
It’s not all centralized, though. The stablecoin is backed by 11.5% of Ethereum (ETH), and an additional 8.8% is collateralized by Lido’s Staked Ethereum (STETH).
Divesting further from USDC to T-Bills
Ethereum DeFi applications developer Sébastien Derivaux told Decrypt that the shift to U.S. treasuries to him represents the “same centralization as USDC.”
Still, it’s an “improvement” he said because the RWA Foundation and custody providers holding DAI reserves are based outside of the United States.
Insofar as Circle, USDC’s issuer, is a U.S.-registered firm, it is still subject to a variety of traditional regulatory concerns. This has been seen during the blowback of this year’s banking crisis, during which Circle announced it had $3.3 billion in cash reserves in Silicon Valley Bank. The firm has also blacklisted various addresses on Ethereum wallets per orders from law enforcement.
One Does Not Simply Destroy DAI: Maker Founder's 'Endgame' Proposal
Decrypting DeFi is Decrypt's DeFi email newsletter. (art: Grant Kempster) Last Friday, Rune Christensen, the mastermind behind crypto’s unofficial central bank, MakerDAO, penned a proposal of epic proportions. It described the continued effects of the Tornado Cash sanctions, said the industry has “failed to show any kind of value to society,” and outlined two potential paths forward for Maker. These two paths, which were made clear by the recent sanctions, demand that DeFi projects either become...
However, the MakerDAO community has also approved a $1.6 billion USDC deposit to Coinbase Custody for stable yields.
Another RWA proposal by U.S.-based asset manager BlockTower Capital also went live on May 29 and is currently in the voting phase.
If approved, the pool would open with a debt ceiling of $1.2 billion, which is equivalent to the size of its current $1.2 billion RWA pool with Monetalis, and will likely further contribute to decreasing USDC collateral.
Though data shows that while DAI is moving away from USDC, it will still be exposed to U.S. regulations via companies like Coinbase and BlockTower.