MakerDAO Starts deploying 500 millions DAI into US Bonds
MakerDAO, the issuer of the stablecoin DAI, has begun deploying $500 million in investments in traditional assets.
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MakerDAO has begun allocating $500 million of its stablecoin reserves to short-term bills and investment-grade corporate bonds.
The Decentralized Autonomous Organization (DAO) approved $1 million in test trading on October 5 following a vote among Maker governance token holders. The full investment will be made in the next few days.
The above decision is part of a strategy to allocate assets to traditional assets with high liquidity and low risk, and because most stablecoins in Maker's Treasury fund are currently "immovable", not profitable for the organization.
According to the proposed results, the DAO will allocate $500 million (in the form of DAI), at the rate of 80-20, to short-term bills and IG corporate bonds, respectively. Nadia Alvarez, head of MakerGrowth said:
“The 80-20 split between Treasury bills and bonds remains a popular choice in the voting process. This shows that the opportunity associated with this move and the uncompromising support from the community is very exciting.”
The DAO has partnered with private lender Monetalis, serving as an asset advisor and helping to form a solid legal structure for Maker in terms of exposure to traditional assets.
Monetalis took on the task of allocating $500 million of stablecoins, split equally between investment management firms Sygnum Bank and Baillie Gifford, into two phases, MakerDAO noted.
In the early stages, Sygnum acted as a crypto-to-fiat gateway, helping to convert 250 million MakerDAO stablecoins into USD, which then diversified into traditional assets.
MakerDAO founded DAI in 2017 as a decentralized stablecoin backed by Ethereum (ETH) and other crypto collateral to back DAI. Over the last year, MakerDAO has switched to a strategy of diversifying its treasury into real-world assets (RWAs). Currently, DAI is the fourth-largest stablecoin with a market capitalization of over $6.3 billion, according to CoinGeko.
However, Maker's latest move raises many questions as the project's founder Rune Christensen recently expressed doubts about real-world assets after Tornado Cash was "locked down" by the US government. ".
Oct 07, 2022