MakerDAO Treasury Manager Monetalis Survives Ouster Vote

UTC by Anisha Pandey · 3 min read
MakerDAO Treasury Manager Monetalis Survives Ouster Vote
Photo: Depositphotos

Monetalis Group, overseeing $1.5 billion in US Treasuries for MakerDAO, narrowly avoided an ouster vote with 59% of votes against removal despite missed deadlines and subpar returns.

Initially, supporters of the ouster led the voting, but significant votes from major MakerDAO delegates shifted the outcome in favor of Monetalis last week. Despite the vote’s result, the proposal’s author deemed it a “moral victory”.

MakerDAO, the issuer of the DAI stablecoin, is a major player in the DeFi space with over $7.7 billion in user deposits. As per the data from DefiLlama, the total value locked (TVL) in the MakerDAO ecosystem is around $5.917 billion. However, the all-time high TVL of $5.75 billion was seen in 2021, and since then, the value has fallen a lot.

Moreover, the native token of the MakerDAO ecosystem, MKR, is currently priced at $2,217 and has a market cap of $2.056 billion as per the data from CoinMarketCap. In a report, DLNews outlined that last Friday, June 21, Monetalis addressed the community’s concerns and delivered many overdue reports and scheduled an overdue audit for July.

Monetalis to Transfer Reporting Responsibilities

Monetalis would transfer its reporting responsibilities to another company, AccountAble. GFX Labs, a MakerDAO delegate that spearheaded the ouster effort, acknowledged this gesture in a governance forum post, appreciating Monetalis’ proactive steps. MakerDAO’s founder, Rune Christensen, is a principal investor in Monetalis. This raised questions about the independence of the protocol’s governance. Christensen seeks a major overhaul of the Maker protocol to address voter apathy and other issues.

This conflict comes at a time when MakerDAO seeks expansion with the debut of PureDAI, a decentralized stablecoin which aims to replace DAI. It is important to note that the new product from the DAO will be released in the final form and as a result, will not need any upgrade and will be unchangeable.

Monetalis manages two investments in US Treasuries for MakerDAO, known as Clydesdale and Coinbase Custody. The ouster proposal by GFX Labs was prompted by Monetalis missing several reporting deadlines and a promised audit. Despite a 5% yield on US Treasuries, the Clydesdale investment barely returned more than 4% to MakerDAO in 2023, according to data from Steakhouse. In contrast, BlockTower, another firm managing US Treasury investments for MakerDAO, reported returns of about 5% in the six months ending May 31.

GFX Labs criticized Monetalis for its repeated failures in reporting and for the underperformance of the Clydesdale vault compared to its underlying assets and another investment, Andromeda, managed by BlockTower.

Monetalis responded to the criticisms in MakerDAO’s governance forum, stating that the rising standards for reserve reporting and structure had taken longer to implement than anticipated. The firm denied that its management had led to significant financial losses for MakerDAO.

Several companies like Mountain Protocol and Superstate have offered their services to MakerDAO, in case Monetalis were ousted during the voting process. As voting began on June 10, several large delegates initially cast votes to remove Monetalis. However, key delegates reversed the momentum last week, voting against the ouster.

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