MakerDAO Adds $1.28B in Bonds to Real-World Asset Holdings

The MakerDAO community has voted to approve a $1.28 billion investment in United States government bonds. The vote is a sign of the DAO’s willingness to invest in more traditional assets.

The MakerDAO community has voted in favor of investing $1.28 billion in United States government bonds, with 99.99% of voting for this investment. This is not the first time that the MakerDAO has voted to invest in real-world assets and it is a sign of a willingness to do this to reduce risk.

MakerDao Users Vote for Diversification of Assets

The government bonds will be purchased via crypto-asset managed BlockTower Capital. The new real-world asset vault that is being opened up is called BlockTower Andromeda. It will see Maker pay 0.15% in arrangement fees to BlockTower, with Celadon Financial Group serving as a broker and Wedbush Securities acting as custodian.

It marks yet another move by the MakerDAO community to invest in traditional financial assets. The entity had already purchased $1.1 billion in government and corporate bonds before. The idea has been to protect DAI by diversifying the reserve assets and improving revenue through investment in more assets.

Reserves Ditch $500M in USDP

DeFi giant MakerDAO has also been voting on other proposals as well. It recently voted in favor of removing the Paxos Dollar stablecoin from its reserve assets. The total sum of USDP in its reserves amounts to $500 million.

That’s about half of the total supply of USDP, which will no doubt come as a blow to Paxos. The MakerDAO proposal stated that the stablecoin simply does not bring enough revenue for the platform. This hurts its own interests as it plans to increase rewards for the DAI stablecoin.

A DeFi Platform Explores Traditional Finance

MakerDAO made headlines when it stated that it was exploring potential investments in the existing financial world. The investment in high-quality government and corporate bonds in October 2022 was noted as being part of a bigger “endgame plan.”

Earlier this year, MakerDAO again set the crypto community abuzz when it explained that it was expanding its United States treasury bond investments to $1.25 billion. The $750 million from the previous $500 million allocation increase will see deployment through a 6-month U.S. Treasury ladder strategy with bi-weekly roll-over.