MakerDAO Voting to Allocate $500 Million Treasury Funds

The decentralized autonomous organization behind the Dai stablecoin, MakerDAO, is currently voting on how to allocate $500 million in treasury funds.

The Maker community had chosen the option for a liquid bond strategy and execution, according to a poll determining how the funds should be allocated. By introducing an asset with real-world value, Maker said it hopes to reduce counterparty and credit risk amidst the current market turmoil. Currently, Maker’s treasury is largely held in stablecoins that generate little-to-no yield, and the community must now choose which new assets to include specifically. 

Preferred allocation

Earlier, the Maker community had chosen both US short-term Treasuries and investment-grade (IG) corporate bonds as their preferred asset allocation options. Now, governance is in the process of determining whether it should allocate the $500 million exclusively to US short Treasuries or rather go for an 80%-20% split between short Treasuries and IG corporate bonds. 

At the time of print, the 80-20 split accounts for a majority of the votes in the poll, which is expected to end later this week. A trust, established by private wholesale lender Monetalis, will hold the bonds on behalf of Maker. But according to details of the asset allocation, only Maker will be enabled to control the funds of the legal structure, and retain the sole ability to liquidate the investment via an executive vote.

Makr my day

MakerDAO has also experienced the ups and downs of tumultuous market conditions. Last month, following the collapse of rival stablecoin TerraUSD, the governance token on the MakerDAO ecosystem, MKR, surged by nearly 50%. This resurgence also represented a boon for DAI. 

However, earlier this month, crypto lender Celsius borrowed 100 million DAI against a collateral of stETH out of every 200 million DAI borrowed from Aave’s Ethereum V2. Consequently MakerDAO suspended its DAI stablecoin from being minted and deposited into Aave’s lending platform.

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