TechFlow news: After the USDC reserves backing DAI neared a drop below $60 million on Tuesday morning local time—falling short of the minimum threshold of over $200 million considered safe—MakerDAO transferred $250 million from Coinbase into DAI's Peg Stability Module (PSM) to maintain its dollar peg.
The PSM is a collateral pool that allows users to mint DAI one-for-one against USDC and enables arbitrage mechanisms to keep DAI anchored to the U.S. dollar. If the PSM reserves are depleted, DAI’s price could rise above or fall below $1.
Prior to the Coinbase Custody transfer arriving, over $100 million had exited the PSM between Sunday and Tuesday. According to a knowledgeable source, large outflows from the PSM appeared to be moving toward centralized exchanges. On the Maker forum, Allan Pedersen, CEO of DeFi lending firm Monetalis, wrote that the team is working on automating the PSM via smart contracts, “However, for now, instruction-based automation using trustees, administrators, legal structures, and banks/centralized exchanges remains secure and stable.”
