With this additional $700 million in the form of government bonds, MakerDAO improved its cash flow diversification. In parallel, the lending protocol voted in favor of an increase in the returns generated by its savings account dedicated to its native stablecoin, the DAI.
MakerDAO increases its collateralization in government bonds by +140%
The decentralized finance (DeFi) protocol MakerDAO, notably famous for its decentralized stablecoin (DAI), bought $700 million of US bonds. This operation was carried out to diversify its reserves and guarantee the stability of its liquidity pools.
Before making any changes to the protocol, the teams behind the decentralized application (dApp) appealed to their community. Last March, governance members voted to increase the debt ceiling by $750 million.
This is not the first time that MakerDAO has procured government bonds. By 2022, the lending protocol had achieved a first purchase of bonds for 500 million dollars. Today, the total sum he holds exceeds $1.2 billion.
To achieve its goals, MakerDAO was accompanied by Monetalis. According to Allan Pedersen, CEO of the firm, this maneuver should improve the financial health of the protocol by generating a new source of income:
” Given the success of the initial rollout and today’s robust bond market, this increased exposure to Maker’s real assets is a solid, reliable, and flexible solution that will generate more revenue for the protocol. »
With these treasury bills, the DeFi protocol ensures a constant income to improve its financial services. So, this announcement comes after another MakerDAO change of increasing from 1% to 3.49% the annual return of the DSRits savings solution dedicated to DAI.
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The boundary between DeFi and traditional finance is shrinking
While decentralized finance remained a niche sector in the cryptocurrency community, its popularization exploded in 2021. The sums deposited on the various protocols skyrocketed during the previous bull market, until they reached a total locked-in value (TVL) fingering the 160 billion dollars.
If this increase was possible, this is partly thanks to traditional finance players. Despite the pessimistic speeches of the leaders of certain banks, everyone is interested in Web3 to innovate their range of services for their customers.
In France, we can cite the case of Société Générale which, with the help of its subsidiary Forge, launched a euro-backed stablecoin on the Ethereum (ETH) blockchain. More recently, Germany’s largest bank, Deutsche Bank, applied for a digital asset custody license.
However, the biggest announcement of recent days remains that of BlackRock. The asset manager with 9 trillion dollars under management made an application to the Securities and Exchange Commission (SEC) to create a spot Bitcoin ETF.
If the Web3 industry needs these financial giants, it’s for a good reason: without their participation, the adoption of solutions using blockchain technology would be severely limitedif not impossible, for the general public.
👉 What is Web3, this decentralized version of the Internet?
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Source: Maker
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Always enthusiastic about new technologies, I gradually moved closer to activities related to Web3 during the year 2021. Over time, I wanted to add my stone to the building. It was then that I became an editor, with the aim of explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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