MakerDAO, the group behind the DAI stablecoin, bought $700 million price of US Treasuries, bringing the DAO’s complete Treasury holdings to $1.2 billion.
The MakerDAO neighborhood had already held the preliminary vote to extend its holdings of US Treasuries from $500 million to $1.25 billion in March.
The proposal handed with 77.13% of the vote in favor and included a plan to spend the extra $750 million on US Treasury bonds. These treasury payments had been to be “bought with maturities equally unfold over six months so that each two weeks an identical quantity of US treasury payments matures (i.e. 12 ‘slots’ out of six month – i.e. 750M/12 = 62.5M per slot).”
As a part of its bond technique, MakerDAO additionally carried out a six-month US Treasury ladder technique involving rollovers each two weeks. This method permits the group to capitalize on the present efficiency atmosphere and enhance income.
The acquisition was made by Monetalis Clydesdale Vault, a digital asset supervisor, on behalf of MakerDAO.
Allan Pedersen, CEO of Monetalis Group, mentioned this enhance in MakerDAO’s publicity to real-world belongings represents a “sturdy, dependable and versatile answer” that may generate extra income for the protocol.
In the meantime, stablecoin issuer Circle has restarted its purchases of US Treasuries as a reserve asset for its Circle Reserve Fund (managed by BlackRock).
Circle had beforehand dumped all of its short-term Treasury holdings amid the US debt ceiling standoff final month, with CEO Jeremy Allaire citing the ‘potential breach of the US authorities’s potential to pay its money owed’ as the explanation. .
Hedging bets
This latest buy aligns with the group’s plans to extend its publicity to those belongings, as outlined in a proposal launched in March 2023.
The transfer was a part of MakerDAO’s efforts to grow to be extra resilient following an incident the place its stablecoin, DAI, briefly misplaced parity with the US greenback, falling to $0.89 on March 11, a day after chapter. of Silicon Valley Financial institution.
The collapse of SVB has impacted a number of main stablecoins, together with Circle’s USDC, which DAI makes use of in its Peg-Stability Module (PSM). In response, MakerDAO had deliberate to diversify from USDC by investing a portion of USDC in its PSM to accumulate the proposed $750 million in treasury payments.
MakerDAO’s US Treasury bond technique is just not new to the group. The DAO first bought $500 million of bonds in October 2022, seeing it as a approach to diversify its collateral pool with conventional, lower-risk belongings.
