MakerDAO's community has voted to remove $500 million worth of USDP stablecoin from its reserves, dealing a blow to Pax Dollar as it held half of the token supply. The MakerDAO treasury will now invest its vast reserves in yield-generating strategies, including Gemini and a 2.6% yield on the $500 million of USDC it holds from Coinbase Prime.

This move is significant for Paxos, as New York state regulators forced it to halt minting Binance USD (BUSD) stablecoin back in February. The MakerDAO community argued that USDP did not generate any revenue for MakerDAO, which hurt its capital efficiency as it plans to increase the rewards rate for DAI savings.