MakerDAO Votes To Allocate 500M DAI Into US Treasuries, Bonds

DAI stablecoin was converted for this diversification effort, with 80% going toward US short-term Treasuries and 20% to investment-grade corporate bonds

article-image

Blockworks exclusive art by axel rangel

share

key takeaways

  • Sygnum bank is the lead partner and will work with Blackrock
  • The move comes amid longer-term governance decision-making process regarding decentralization

MakerDAO, the protocol behind the DAI stablecoin, is moving $500 million worth of the token into short-term US Treasuries and corporate bonds. 

The move into high-quality bonds signals MakerDAO’s intent to diversify its balance sheet in light of rising interest rates. The DeFi lending protocol may seek to expand its exposure to increase the amount of yield it earns for its investors.

The decision to leverage DAI beyond crypto was put to a vote in June by holders of the Maker Protocol governance token, MKR.

Short-term Treasuries will make up 80% of the $500 million fund, with 40% of that into zero-to-one year US Treasury iShares ETFs and 60% into one-to-three year US Treasury iShares ETFs from BlackRock.

The other 20% is going to zero-to-five year investment-grade corporate bonds from both the US Treasury Index and bonds from investment management firm Baillie Gifford.

Loading Tweet..

Stakeholders voted via an executive proposal, known as MIP65, to let DeFi asset adviser Monetalis Clydesdale deploy one million DAI.

If Monetalis can successfully access and withdraw the funds, then 250 million DAI will be allocated to the Swiss digital asset bank Sygnum, which will help issue the funds into a portfolio of BlackRock iShares ETFs.

Sygnum stated that MakerDAO chose it as a lead partner “to boost returns and further strengthen the balance sheet.” 

Afterward, an additional 250 million DAI will be sent to Baillie Gifford to assist with purchasing and holding the assets.

The MakerDAO community was strained recently by disagreements around The Endgame Plan that aims to improve the protocol’s governance mechanisms. The group has yet to reach a consensus over the best approach toward maximizing decentralization. 

Endgame, drafted by MakerDAO co-founder Rune Christensen, outlined the intention for DAI to maintain a 1:1 ratio with USD for at least three years, but only if the protocol reaches a 75% decentralized collateral threshold. Otherwise, DAI could lose its stablecoin status and become a free-floating asset. 

Maker’s latest legacy investment strategy, hopes to increase revenue to the protocol and diversify its asset base, which is seen as necessary for DAI supply to expand, alongside further adoption.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

4.png

Research

This months PPGC covered four main areas. Firstly, debriefing the progress and status of the mainnet implementation of the Ahmedabad hard fork. Secondly, a retrospective on the testnet phase of the Ahemdabad Hard Fork. Thirdly, an update on PIP-36 which involves replaying failed state syncs. Lastly, PIP-47 which pushes upgrades to the Polygon Protocol Council.

article-image

Institutions to test out the settlement of “digital assets and currencies” on a network that annually carries more than 5 billion financial messages

article-image

After Bitwise’s XRP ETF filing this week, one industry watcher notes: “Politics will determine whether this happens soon or in a few years”

article-image

Plus, a look back at some of the SEC’s biggest enforcement moves under Gurbir Grewal

article-image

The forward-looking financial system is being championed by several contributors to India’s UPI digital money system

article-image

Multiple teams are pursuing integration cross-chain and off-chain

article-image

An SEC spokesperson told Blockworks the Ripple judgment clashes with Supreme Court precedent and securities laws