MakerDAO, which claims to be the “longest-standing” DeFi lending protocol and creator of DAI, the original decentralized stablecoin, has announced that it has “completed the purchase of an additional $700 million worth of US treasuries, bringing the value of its total bond allocation to $1.202 billion.”
Completed on behalf of MakerDAO by the Monetalis Clydesdale Vault, this marks the second successful round of bond purchases “after the MakerDAO community initially approved a $500 million debt ceiling for US Treasury bonds in 2022.”
In March of this year, Maker Governance approved “a $750 million increase of the debt ceiling to a total debt ceiling of $1.25 billion, with this deployment now complete.”
Allan Pedersen, Chief Executive Officer, Monetalis Group, said:
“MakerDAO is a pioneer and leader in the DeFi space and has built up a large volume of funds in its peg-stability-module, which ensures the stability of the DAI stablecoin. Through the diversification of its collateral pool with this US Treasury ladder strategy, Maker is taking advantage of the current yield environment and putting its assets to work. Given the success of the initial deployment and today’s robust bond market, this increase in Maker’s real-world asset exposure is a strong, reliable, and flexible solution that will generate more revenue for the protocol.”
In the current market environment, the Clydesdale Vault has been able “to generate yields between 4 and 5%.”
With the US Treasury ladder, MakerDAO is “locking in a consistent yield that will pay out over the coming months and will directly at bolster the robustness and stability of the DAO and DAI.”
Allan Pedersen, Chief Executive Officer, Monetalis Group, concluded:
“MakerDAO continues to push the boundaries within DeFi, creating opportunities for both individual and institutional participants. By pursuing a diversified portfolio approach, Maker enhances the robustness of its platform and stablecoin while also generating new means of revenue to continue to attract participants to Maker and the wider DeFi ecosystem.”
The increase in MakerDAO’s treasury holdings “follows another recently approved executive vote by Maker to increase its DAI Savings Rate (DSR) from 1% to 3.49% providing strong DeFi yield options to DAi holders.”
Maker’s continued diversification of its reserves “towards real-world assets and bonds incrementally increases its control over DAI’s liquid backing and enables it to pass on additional revenues directly to the DSR.”
As covered, MakerDAO claims it is “the decentralized autonomous organization (DAO) that powers the longest-standing DeFi lending protocol and enables the creation of DAI, the original decentralized stablecoin.”
Governance of MakerDAO is described as being “entirely decentralized, with proposals tabled and voted on by the Maker Community, comprising people from all over the world.”
Utilizing an embedded governance mechanism, the decentralized and self-sustaining Maker Community holds sole authority “to enact changes to the Maker Protocol through on-chain voting using the native governance token, MKR.”