Last week, the governance of MakerDAO gave its agreement for a first pilot transaction, of a project which should make it possible to invest in the long term in 500 million dollars of American bonds. This should allow the DAI to partially emancipate itself from the USDC, which constitutes a large part of its reserves.
MakerDAO is interested in bonds
The Decentralized Finance Protocol (DeFi) MakerDAO binds itself a little more to real-world assets (RWA) through investing in US bonds. Indeed, the governance of the platform has given its approval for a program to invest one million dollars in Treasury bonds.
It is in fact a pilot transaction constituting the first stage of a plan worth 500 million dollars in total.
Following the vote, the governance decided that 40% of this amount will be distributed in bonds with a maturity of up to one year and that the remaining 60% would be made up of bonds with a maturity of one to three years. These obligations will in fact be represented through two ETFs, each issued by BlackRock.
This project was initiated by Monetalis Clydesdale, through its CEO Allan Pederson. One of the objectives of this proposal is to reinvest part of the USDC, used largely to keep the DAI priced at one dollarbut which yields no return.
Thus, Monetalis will be responsible for managing this capital, although at no time will they have direct access to the funds. MakerDAO will thus retain all its ability to decide what will or will not be done with these bond investments.
Monetalis will separate these amounts in two equal shares between Sygnum Bank and Baillie Gifford. One is a crypto bank based in Switzerland and Singapore, while the second is a Scottish investment firm founded in 1908 in Edinburgh.
👉 To go further – Find our guide on the stablecoin DAI
The No. 1 exchange in the world – Regulated in France
Binance
-10% off fees with code SVULQ98B 🔥
MakerDAO and Real World Assets
It is less and less surprising to see MakerDAO taking an interest transactions involving real-world assets. Indeed, we can cite, for example, the participation of up to 100 million dollars in the operations of Huntingdon Valley Bank.
Nevertheless, this project initiated last February echoes the criticisms that the DAI is often the target of: USDC exposure. Here, the DAI will partly separate from the USDC, and therefore from Circle, its issuing company. However, we can still notice that this “dependency” will be, in a certain way, transferred to BlackRock through the choice of ETFs.
Regarding stability against the dollar, bonds are a relevant choice, described as “low risk” and which have the merit of offer an additional return compared to a cash dollar.
On the other hand, we can observe that this idea runs counter to the reflections launched by Rune Christensen, the founder of MakerDAO who imagined a future DAI deindexed from the dollar.
However, these reflections were completely unrelated to this governance proposal, which was put in place much earlier. Moreover, they do not currently have not yet led to concrete actionsif indeed the DAI emancipates one day from the dollar.
This is an example of the strength of the decentralization of a Decentralized Autonomous Organization (DAO): one person cannot, on their own, make these choices pass as they see fit, it will have to comply in the majority opinion of the community.
👉 Also read – “The majority of institutions are exploring decentralized finance (DeFi)” – Interview with Sébastien Derivaux from MakerDAO
Join Experts and a Premium Community
PRO
Invest in your crypto knowledge for the next bullrun
Source: MakerDAO
Newsletter 🍞
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
330 items
