MakerDAO considers removing $390M of Gemini Dollars from DAI Reserve.

The MakerDAO lending platform and stablecoin issuer in Decentralized Finance (DeFi) is considering removing $390 million worth of Gemini’s GUSD stablecoin from its reserves.

The community of the protocol is currently voting on a proposal to reduce the maximum amount of GUSD held in the Peg Stability Module (PSM) of Maker’s DAI stablecoin reserve from $500 million to $110 million.

Less than 24 hours before the end of the vote, about 94% of those who have already voted are in favor of the proposal to cut GUSD. However, a similar proposal in January had a last-minute rush of votes in favor of keeping GUSD, pushing that side to a razor-thin 50.85% majority.

The vote is significant for the future of GUSD, as Maker holds around 88% of the stablecoin’s circulating supply of $568 million. Maker supports the value of the $4.5 billion DAI by holding cryptocurrencies such as Circle’s USDC and GUSD in the reserve, and increasingly investing in real-world assets such as government bonds.

Gemini, the crypto exchange founded and run by Tyler and Cameron Winklevoss and the issuer of GUSD, pays MakerDAO a 2% annual reward for using the token as a reserve asset. However, the proposal argues that the platform could benefit from better revenue opportunities, such as investing in short-term U.S. Treasuries, which currently offer about a 5% yield.

Read more: MakerDAO Paves Way for Additional $1.28B U.S. Treasury Purchase

“Reducing GUSD exposure could allow for better capital efficiency by deploying funds into higher revenue-generating opportunities,” the proposal said.

Edited by Stephen Alpher.