After a brief hiatus, the MakerDAO Direct Deposit Module (D3M) program is back up and running, with the first partner being the decentralized lending platform Aave. The announcement was made via Twitter, with Maker stating that the Aave D3M reactivation proposal had been approved and deployed through the latest MakerDAO Executive Vote.
D3M is a wholesale credit line that enables interaction between Maker’s credit facility engine and Aave’s lending market. It guarantees a stable borrowing rate for Aave’s DAI market users and automates the process of balancing DAI liquidity to a desired supply-balance ratio. Additionally, it enforces a maximum variable borrow rate on Aave’s DAI lending market.
🌊 MakerDAO reactivates the @AaveAave Direct Deposit Module (D3M)
Through a wholesale credit line denominated in DAI, D3M facilitates the interaction between Maker’s credit facility engine and Aave’s lending market, guaranteeing a stable borrow rate for Aave’s DAI market users. pic.twitter.com/gZ8fxXFGqA
— Maker (@MakerDAO) February 28, 2023
The new Aave D3M deployment has set an initial debt ceiling of 5 million DAI and a target borrow rate of 2%. By setting the target borrow rate at 2%, the D3M automatically balances Aave’s DAI-supplied liquidity, ensuring the market borrow rate reaches a stable 2%.
With this reactivation, the Maker Protocol is now directly supplying automated liquidity in DAI to the two largest lending protocols in DeFi, Compound Finance and Aave. This move will provide more predictable rates for their borrowers, and MakerDAO stands to benefit from providing automated liquidity to third-party lending protocols.
According to Maker, the D3M with a debt ceiling of 5 million DAI has already been deployed to the Aave protocol, with 5 million fresh DAI generated and supplied to Aave’s DAI market.
The reactivation of D3M is significant for the DeFi ecosystem as it offers a structured and adaptable formula to connect the various building blocks of the DeFi economy. The program’s return demonstrates the potential for MakerDAO to continue providing liquidity to other DeFi protocols and contributing to the development of the ecosystem.
In conclusion, the relaunch of the D3M program with Aave as the first partner is an important milestone for the DeFi ecosystem. It demonstrates the potential of MakerDAO to provide liquidity to third-party protocols and contribute to the growth of the ecosystem. The new deployment of D3M will provide more predictable rates for Aave’s DAI market.
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