MakerDAO is now voting on whether to invest 500 million Dai (DAI) stablecoins in a combination of treasuries and bonds in the United States. This is intended to assist it in weathering the bear market and using its untapped reserves.
Following a straw vote in a governance Signal Request, the members of the decentralized autonomous organization (DAO) must now determine whether the dormant DAI should be invested entirely in short-term treasuries or divided between 80% treasuries and 20% corporate bonds.
MakerDAO manages the Maker protocol. It pays out DAI stablecoins pegged to the US dollar in return for deposits of Ether (ETH), Wrapped Bitcoin (wBTC), and around 30 other cryptocurrencies.
This suggestion is a significant step forward for Maker DAO since it demonstrates the company’s desire to go beyond cryptocurrencies and utilize its flagship DAI to profit from “safe” conventional assets.
The Maker Governance votes to determine how to allocate 500 million DAI between different investment strategies.
This allocation poll is a result of the passage of MIP65: Monetalis Clydesdale: Liquid Bond Strategy & Execution.
A recap on how it would work.
— Maker (@MakerDAO) June 27, 2022
Doo, one of the most influential delegates in MakerDAO, voted in favor of the 80/20 split. He believed that the allocation would be beneficial to the protocol in the long term for a variety of reasons, including exposing it to significant conventional financial institutions and allowing it to learn how to manage money in a bad market.
“As TradFi is seeing interest rate increase due to the FED,” Doo told Cointelegraph on June 29, “Maker protocol working with TradFi to take advantage of the high interest would be able to strengthen its revenue model.”
MakerDAO allows users to vote on ideas by staking Maker tokens (MKR). So far, 12 MKR tokens, or 99.3 percent, have voted in favor of splitting the Dai between treasuries and bonds. With 169,196 MKR tokens invested, governance involvement at Maker is now at its lowest level for 2022.
The poll closes on June 30 at 12:00 p.m. EDT, giving other voters just a few hours to select a side, remain neutral, or reject the alternatives.
Once an option has been selected, the European wholesale lender Monetalis will provide MakerDAO with access to the financial instruments that it requires. Monetalis CEO Allan Pedersen posted a Signal Request in the forum with ideas for what his firm may do for the DAO.
The firm aspires to “low carbon resource efficiency,” as defined by the United Nations.
The DAO opted to invest such a big sum of money because numerous of its members said that doing so would benefit the protocol’s bottom line while posing minimal risk.
Sebastien Derivaux, a member of MakerDAO’s strategic finance core team, said in a June 20 review of the allocation’s feasibility that, although the sum in issue seems to be large, it should be a safe decision for the DAO:
“An investment of 500M DAI in this context, that is expected to remain liquid and low volatility, is therefore not a significant risk for the DAI peg nor the solvency of MakerDAO.”
Derivaux said that the two solutions now being voted on were the best of the five possibilities discussed.
Despite Maker’s significant action, the MKR price has dropped 1.6 percent in the previous 24 hours to $964.71, according to CoinGecko.
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