MakerDAO would step up its exposure to US Treasuries by $750 million. This measure would diversify the security and exposure of the Dai stablecoin.
MakerDAO wants to strengthen the collateralization of its stablecoin Dai
The MakerDAO protocol passed a measure yesterday that will increase its US bond exposure by 150% (from $500 million to $1.25 billion).
This move will increase the DAO’s exposure to real-world financial assets and high-quality bonds. On February 11, the stablecoin Dai had lost his one dollar peg because of its excessive exposure to the USDC. The measurement has already been validated by 77% of MakerDAO members. One of the company’s representatives commented on this:
With the new measure, MakerDAO will use the $750 million in PSM to buy more US Treasuries, increasing the liquidity of the DAI stablecoin.
Bonds (or warrants) will be purchased on the same maturities, at two-week intervals on a total of six months. In the end, 12 slots of 62.5 million dollars each will be purchased by the DAO. With this metric, MakerDAO expects a year-round return of approximately 4,5 %. According to the report, MakerDAO’s profits will likely be boosted by trading fees.
This measure allows Maker to take advantage of the returns available on the financial market (yield environment) and generate additional income in a liquid manner on its PSM (Maker’s PSM Assets). Les US Federal Reserve information show that the yield on US bonds (10-year constant maturity) was 3.6% on March 14, 2023.
More than 2.1 million profit for MakerDAO
MakerDAO had already allocated half a billion to US bonds in the past. Since October 2022, this sum has been managed by the financial company specializing in the DeFi, Monetalis Clydesdale. By January 2023, the measurement had yielded more than 2.1 million dollars at the DAO.
Under MIP65, MakerDAO deployed ~$500 million in short-term US treasury bond ETFs.
As of January 2023, this investment strategy has brought ~2.1 million in lifetime fees to the Maker Protocol.
→ https://t.co/fa2JVuvoOQ pic.twitter.com/jDA6ExScgE
— Maker (@MakerDAO) March 7, 2023
On the DAO forum, we can read that Maker has not yet received the 500 million Monetalis. Some people have complained that queries made in the Discord channel and in the forum weren’t answered quickly, leaving few options to analyze the metric.
In the last act crypto of the week, the fall of the SBV caused an earthquake in all financial sectors and led to the fall of stablecoins USDC et Dai. In a Twitter thread, MakerDAO indicated that its entity was working on improving the liquidity of its assets through money market investments. These diversifications will mainly be made on US Treasury bills in order to diversify DAI’s liquidity.
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