MakerDAO to allocate 500 million DAI from reserves into bonds

The MakerDAO DeFi platform community has begun voting on investing unallocated 500 million DAI in “low-risk bonds”.

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.

🧵

1/ pic.twitter.com/SdF9QT2OM6

— Maker (@MakerDAO) June 27, 2022

The initiative aimed at mitigating the bear market effects. At the time of writing, MakerDAO’s balance sheet held $4 billion in DAI. Additionally, for these purposes, up to $500 million could be drawn from the DAI/USDC pool.

Among the strategies under consideration are a 100% allocation to U.S. Treasuries, or an 80:20 split between government and investment-grade corporate bonds.

The proposed options are characterised by low volatility, with capital risk significantly below 4%.

The investments […] do not pose significant risk to either the DAI peg or MakerDAO’s solvency, according to the proposal.

As of writing, 79.6% of votes were for the second option, 7% for the first, and 13.5% of MKR holders opposed deploying treasury funds.

Voting closes on June 30 at 16:00 (UTC).

If approved, the protocol would move beyond the crypto market and begin earning income from traditional financial investments through the stablecoin it issues.

The invested funds will be held in a trust established by Monetalis, a private German group specialising in financial planning.

In June, MakerDAO paused Aave-related lending operations.

Follow ForkLog’s Bitcoin news in our Telegram — cryptocurrency news, prices and analysis.