MakerDAO Seeks To Invest $500 Million In Untapped Territories OF Bonds And Treasuries


As the bear market trend is getting more intense, many protocols and other crypto-related firms are making moves for survival. On its part, MakerDAO plans on a minimal risk investment strategy to raise revenue. The DAO is taking steps into traditional investments using the native DAI stablecoin.

Currently, MakerDAO is undergoing a proposal voting for the use of some of its reserves for investment. It proposes to venture into the U.S. Treasuries and bonds by investing about 500 million DAI tokens.

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The members of the DAO would decide through their votes how to use the reserve DAI token following the poll in a government Signal Request. In making the decision, they have two options for the investment plan.

The first is to split the funds into treasuries and bonds in an 80:20 ratio. Conversely, they would use the whole funds for the short-term investment in treasuries.

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Through the proposal, the DAO would receive a great directive stance for the protocol. It highlights the expansion plans for the protocol to venture into different phases beyond cryptocurrency. Hence, it could generate more revenue from low-risk traditional investment sectors using its native token, DAI.

MakerDAO Members’ Participation

Members of the MakerDAO can only participate in proposal votes through staking of their Maker (MKR) holdings. Generally, Maker is experiencing its lowest governance participation in 2022 as it has only 169,196 MKR as staked tokens.

For the ongoing voting, about 99.3% MKR tokens support the split option for DAI investment in both treasuries and bonds. Shockingly, the votes are coming from just 12 participants.

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MakerDAO Seeks To Invest $500 Million In Untapped Territories OF Bonds And Treasuries
Maker falls by 2% on the daily chart | Source: MKRUSD on TradingView.com

The Maker Project has MakerDAO as its governing body that makes major decisions concerning the protocol. The community issues DAI stablecoin, which is pegged on the U.S. dollar. The issuance of the stablecoin gets users through the exchange of almost 30 different crypto coins, including Wrapped BTC and Ether. CoinGecko revealed that MKR plummeted by 1.6% within the last 24 hours.

Several members of MakerDAO had recommended the use of the dormant funds. According to their suggestions, such a move would bring a profitable yield for the protocol, especially if channeled to a low-risk venture. Hence, the decision of the DAO to use the huge amount of funds.

According to the community’s report, the poll is expected to end by 12:00 pm EST on June 30. This means there’s only a limited time for others to vote, reject the two options, or completely abstain from voting.

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When the community finally gets a chosen option, it expects to receive the proposed financial instruments from Monetalis.

The firm is a European wholesale lender dealing in financial instruments. Allan Pedersen, the CEO of Monetalis, was the issuer of the Signal Request on the MakerDAO platform. He allowed his company to be the sourcing operator for the community.

Featured image from Pexels and charts from TradingView.com


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