MakerDAO (MKR) to Invest $500M in US Treasuries and Bonds

The governing body behind the protocol will invest $400 million in US treasuries and $100 million in corporate bonds.

MakerDAO MKR us bonds

MakerDAO, the governing body behind the largest decentralized finance (DeFi) lending protocol, Maker, has announced it’s going forward with the plan to invest $500 million in short-term US treasuries and corporate bonds.

The months-long community vote ended with the outcome of investing $400 million in US treasuries and $100 million in corporate bonds. A pilot investment of $1 million in bonds has already been transferred, and the rest will follow soon.

European DeFi asset advisor Monetalis will be in charge of overseeing the conversion of $500 million worth of MakerDAO’s native stablecoin, DAI, into US dollars. Digital asset bank Sygnum will convert one half, and Baillie Gifford, a UK-based investment management firm, the other.

Sponsored

MakerDAO’s plan to utilize untapped reserves can be seen as a way to diversify its portfolio and generate additional yield since the majority of MakerDAO’s $9 billion DAI collateral is in USDC, a stablecoin that gives no yield.

However, investing in US treasuries and bonds can come off as a bit of a surprise. In August, MakerDAO’s founder Rune Christensen proposed to divest DAI from USDC, citing Circle’s, the creator of USDC, cooperation with the US government in the Tornado Cash story.

Sponsored

MKR, MakerDAO’s governance token, is currently trading 3% higher at $853.35, according to CoinMarketCap. It’s down 87% from its all-time high of $6,339. DAI is the fourth largest stablecoin in the market.

On the Flipside

  • $500 million is only 5% of the total $9 billion DAI collateral.

Why You Should Care

MakerDAO is the largest DeFi lending protocol. While the protocol’s ethos is maximum decentralization, the plan to invest in US treasuries and corporate bonds raises questions about the project’s future.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Arturas Skur

Arturas Skur is a cryptocurrency news reporter at DailyCoin who covers Web 3.0 domains, DeFi, and Ethereum Layer-2s. With over five years of experience in journalism and public relations, Arturas brings his critical thinking and analytical abilities to deliver insightful news stories. In his free time, he enjoys hiking, playing with his dog, and reading.