14,8% of MakerDAO's DAI TVL is collateralized by Treasury bonds.
The governance of MakerDAO, the protocol responsible for issuing the decentralized stablecoin DAI, has approved a proposal to purchase an additional $700 million in Treasury bonds.
This governance proposal is part of an investment strategy implemented by the MakerDAO community last year, which is focused on generating returns from investing in traditional financial instruments, such as short-term Treasury bonds.
MakerDAO’s decentralized community voted in March to increase the debt ceiling, or upper limit, of a real-world asset (RWA) vault to $1.250 billion, allowing the protocol to invest a larger amount of its reserves into traditional financial assets. This strategy seeks to capitalize on the current yield environment for traditional assets to diversify and increase the protocol’s revenue beyond crypto lending.
Treasury bonds in DAI reserves
MakerDAO's traditional asset investment strategy was introduced in June 2022 by Allan Pedersen and was later approved by the project's community in October. At the time, MakerDAO's decentralized governance authorized the investment of $500 million of DAI reserves in bonds of the Treasury.
MakerDAO is the first protocol in the DeFi ecosystem to invest part of its reserves in bonds to support the value of its stablecoin.
Following the approval of the new governance proposal, DAI reserves have now totaled $1.200 billion invested in Treasury bonds, representing 14,8% of the stablecoin's total value locked or TVL, according to CoinMarketCap.
MakerDAO Restructuring
MakerDAO is one of the most active projects in the DeFi ecosystem. Last month, its founder, Rune Christensen, presented a novel plan called Endgame to restructure the protocol with the aim of improving its capabilities, increasing decentralization, and ensuring security and efficiency.
In his plan, Christensen considers creating new versions of the DAI stablecoin and the MKR token to unify them under a single brand that incorporates new properties and encourages innovation.
Endgame also aims to create new subDAOs, improve the staking rewards system, and, among other things, build and deploy a new blockchain optimized for the DAO economy.
Continue reading: MakerDAO founder Rune Christensen proposes creating new versions of DAI and MKR
