9/7/2023 0 Comments Gemini earn gusd![]() ![]() I'm hopeful that Gemini sees "owning the market" for US stablecoin as a worthy money loser, so even if Genesis does something to lose the money, Gemini will reach into their deep pockets to keep GUSD Earn stable, but I'm not counting on it. etc., but I'm skeptical that under a big crunch, Gemini won't pass the buck to us, because they are explicitly reserving that right in the T&C's. We can infer that Genesis at least requires some collateral, as they're not in the business of losing money, and obviously that would jeopardize their standing with Gemini if they lose the capital etc. I mean, sure this might be the case, but also it might not be the case if BTC goes to $20k? It's totally opaque. There is no guarantee or insurance.Īccording to the press releases, the Gemini risk officer said they looked at Genesis and the loans are over collateralized, so they are very happy. They also say you are risking your entire amount. However, “even a significant depegging would be unlikely to rattle DAI,” he added.They are definitely using Genesis. This is most likely to happen if BTC goes very low, very quickly. The “worst-case scenario” for GUSD would be Gemini’s troubles forcing a delay in GUSD redemptions and causing a temporary deviation from its dollar peg, according to Carey. I think the biggest risk on GUSD in Earn is that Genesis defaults. “It seems possible that the community may opt to move on from GUSD in favor of new pilot projects,” he wrote at the time. “Holding GUSD is akin to holding GUSD’s underlying assets with additional risk related to Gemini,” Carey said. Read more: Crypto Exchange Gemini Suffers $485M Rush of Outflows Amid Contagion Fears GUSD was an integral part of Gemini’s Earn program, offering as high as 8% annual yield for investors depositing GUSD, according to Kaiko. According to recent reports, Genesis is laying groundwork with its creditors for a bankruptcy filing. I sent GUSD to Celsius because the rate was higher and a promotion to import stablecoins. ![]() I guess the only risk it protects against is getting your Gemini account drained through a hack. The withdrawal freeze has led to scuffling between the two firms. So if Gemini was to go under, GUSD wouldn’t be worth anything anyway, and GUSD kept in a cold wallet would be worthless. ![]() Users’ assets in the Earn program are locked up at the moment, after Genesis’ lending arm, which powered Gemini Earn, suspended customer withdrawals in November as FTX collapsed. When you factor in the stability of GUSD, which as far as I am concerned is rock solid unless Gemini folds entirely, the yield is pretty fantastic. “Recent MakerDAO governance discussions have raised concerns about GUSD’s heavy reliance on the PSM and Gemini holding GUSD reserves at Silvergate,” Riyad Carey, analyst of digital asset research firm Kaiko, wrote in a report earlier this month.Ĭurrently, MakerDAO holds some 85% of all GUSD in circulation, making Gemini’s stablecoin overwhelmingly reliant on its relationship with MakerDAO. I know it is not without risk - as Genesis is the lender and the funds are not FDIC insured - but for the time being, 7.4 is 15x what youll get in the best high yield savings account (0.50). Gemini is the brainchild of mega-crypto investors Cameron and Tyler Winklevoss, who still helm the company.Ĭrypto investors worry that Gemini’s woes may destabilize its GUSD stablecoin, roiling Maker’s $5 billion DAI. The voting comes as Gemini, the issuer of GUSD, is under pressure after halting withdrawals from its yield-paying product, called Gemini Earn, and because of a lawsuit by the top U.S. Starting in October, Gemini has been paying a 1.25% annual yield to Maker on GUSD holdings based on an earlier agreement. Currently, MakerDAO holds $489 million in GUSD in its Peg Stability Module ( PSM) facility, which acts as a reserve system with $7 billion of assets to back its DAI stableoin’s value and price peg to the dollar. The Maker protocol is led by a decentralized autonomous organization (DAO), in which holders of the protocol’s governance token, maker ( MKR), can vote on proposals. The final result may change the voting ends Thursday (Jan. Voters are casting votes whether to keep the GUSD ceiling at the current $500 million, to decrease it to $100 million or to zero, which would boot GUSD from the reserve, according to Maker’s governance site.Īt press time, 69% of the votes favored keeping the GUSD ceiling intact at $500 million, while 31% voted for dropping GUSD to zero. The ongoing vote is testing confidence in Gemini, the Winklevoss-founded exchange that has been swept up in recent crypto contagion. Decentralized finance giant MakerDAO's community was heavily favoring keeping Gemini’s GUSD stablecoin as part of Maker’s reserve. ![]()
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