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MakerDAO Plans to Invest $500 Million in Bonds and Treasuries With “Minimal Risk”

MakerDAO is now voting on a plan to invest 500 million Dai (DAI) stablecoins into a mix of US treasuries and bonds in order to use untapped reserves and weather the bear market.

The DAO members must now determine whether the dormant DAI should be invested wholly in short-term treasuries or divided 80/20 between treasuries and corporate bonds after a straw poll in a governance Signal Request.

The Maker system is managed by MakerDAO, which in turn issues DAI stablecoins linked to the US dollar in exchange for user deposits of ETH, wBTC, and almost 30 other cryptos.

This plan is a significant development for Maker DAO since it shows the organization’s desire to go beyond the crypto space and use its flagship DAI to generate returns from more conventional, “safe” financial ventures.

By staking their Maker tokens (MKR), participants in MakerDAO can vote on proposals. With only 12 voters, the option to divide the Dai between treasuries and bonds has received support from 99.3% of MKR tokens thus far. With 169,196 MKR tokens invested, governance engagement at Maker is currently at its lowest level since 2022.

There is a very limited window of opportunity for additional voters to choose a side, abstain, or reject the options before the poll closes on June 30 at 12:00 EST.

After a decision is made, MakerDAO will have access to the desired financial instruments through European wholesale lender Monetalis. Allan Pedersen, the CEO of Monetalis, posted a Signal Request in the forum with possibilities his company may offer the DAO.

According to the UN’s definition, the company wants to make the transition to low-carbon resource efficiency.

The DAO’s choice to invest such a sizable sum of money is based on recommendations from a number of its members who think that using the unused assets might increase the protocol’s revenue with little risk.

Sebastien Derivaux, a member of MakerDAO‘s strategic finance core team, suggested in a June 20 evaluation of the allocation’s viability that even if the sum in question appears to be rather big, it should be a secure decision for the DAO:

“An investment of 500M DAI in this context, that is expected to remain liquid and low volatility, is therefore not a significant risk for the DAI peg nor the solvency of MakerDAO.”

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