Maker Governance Plans to Invest $500 Million in US Treasury and Bonds

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by Bhushan Akolkar · 2 min read
Maker Governance Plans to Invest $500 Million in US Treasury and Bonds
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Several members of MakerDAO said that putting the unused funds in US treasuries help the protocol get a boost to its bottom line and that too with minimal risk. 

With the global macros turning hostile and the crypto market entering a severe bearish phase, Maker Governance has decided to adopt the route of traditional investments. MakerDAO, the issuer of DAI stablecoin is looking to invest in US Treasury Bills and bonds.

The announcement came on Tuesday, June 28, wherein MakerDAO announced to invest around $500 million. The announcement noted:

The Maker Governance votes to determine how to allocate 500 million DAI between different investment strategies. This allocation poll is a result of the passage of MIP65: Monetalis Clydesdale: Liquid Bond Strategy & Execution.

MakerDAO is currently undergoing a straw poll in a governance ‘Signal Request’. Here, the members of the DAO will vote on whether the dormant DAI should entirely go into short-term treasuries. The other option is a split of 80% into treasuries and 20% into corporate bonds.

The decentralized autonomous organization MakerDAO is the governing body of the Maker protocol. It is responsible for issuing the USD-pegged DAI stablecoin in exchange for Ether (ETH) and 30 other cryptocurrencies.

The proposal shows that crypto market players are willing to go beyond the crypto realm and willing to earn from traditional safer financial investments. MakerDAO will allow participants to vote on the proposal by stalking the MKR tokens. Currently, 99% of the DAI holders have voted for the option of splitting their DAI between treasuries and bonds. The voting for the same will end on June 30.

Monetallis Will Serve As A Mediator for MakerDAO

MakerDAO has partnered with European wholesale lender Monetalis to provide access to traditional financial instruments. Monetalis CEO Allan Pedersen issued the Signal Request in the forum offering MakerDAO users two options.

MakerDAO said that its decision to invest such a large amount of funds comes on the recommendations of several members who believe that deploying the unused funds will help the protocol get a boost to its bottom line and that too with minimal risk.

Sebastien Derivaux, a member of MakerDAO’s Strategic Finance Core Unit, said that although the amount in question seems too high, it is still a safe choice 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,” he added.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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