MakerDAO to Move $500 Million Into U.S. Treasuries and Bonds

Decentralized stablecoin protocol MakerDAO has pledged to convert $500 million of its DAI reserves into US bonds and treasuries.

This marks the decentralized autonomous organization’s (DAO) first investment in high-quality public debt.

  • As MakerDAO explained on Twitter, MKR holders voted to deploy USDC from its peg stability module into liquid bonds, using its recently created Maker Vault of real-world assets.
  • The allocation will consist of 20% investment grade corporate bonds and 80% US Treasuries.
  • So far, only 1 million DAI has been deployed in escrow, with the rest requiring further executive votes to meet the newly established 500 million DAI debt ceiling.
  • The move comes amid a broader effort among stablecoin issuers to demonstrate that their assets are backed by reliable reserves.
  • Tether, the world’s largest stablecoin issuer, has repeatedly reduced its exposure to commercial paper this year. His last update suggested that its commercial paper is down to just $50 million, while US Treasuries make up 58.1% of its $68 billion portfolio.
  • Similarly, Circle and Paxos, custodians of USDC and BUSD respectively, revealed in July that its reserves are backed only by US government cash or debt.
  • MakerDAO has historically operated differently. In an effort to remain decentralized, its reserves have been backed by a basket of various cryptocurrencies. These have included other stablecoins such as USDC as well as volatile cryptocurrencies such as Bitcoin and Ethereum.
  • However, the DAO has been trying to become less dependent on USDC after Circle revealed its censorious hand in August: freezing USDC locked inside the TornadoCash privacy protocol.
  • At that time, the founder of MakerDAO proposed completely moving USDC reserves from DAO to Ethereum.

Binance Free $100 (Exclusive): Use this link to sign up and get $100 free and 10% off fees on Binance Futures in your first month (terms).

PrimeXBT Special Offer – Use this link to sign up and enter code POTATO50 to receive up to $7,000 in your deposits.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *