MakerDAO Wants to Invest $500M in 'Minimum Risk' Treasurys and Corporate Bonds

MakerDAO is currently voting on a proposal to help it weather a bear market and tap unspent reserves by investing $500 million worth of the Dai stablecoin in a portfolio of U.S. Treasury and corporate bonds.

Following a Signal Request poll, members of the decentralized autonomous organization (DAO) must now decide whether to invest all unused DAI in short-term treasury bonds or split 80% of assets 20% of assets are divided into corporate bonds.

MakerDAO, the governing body of the Maker protocol, issues a dollar-pegged Dai stablecoin that can be exchanged for user deposits of ethereum (ETH), wrapped bitcoin (WBTC) and nearly 30 other cryptocurrencies.

The proposal represents a major step for Maker DAO, signaling its intent to move beyond the cryptocurrency space and earn yields from traditional "safe" financial investments through its flagship DAI.

MakerDAO allows participants to vote by staking their MKR. The option to split Dai into treasuries and bonds has so far been supported by 99.3% of voters, although only 12 members supported it. Maker governance participation is currently at its lowest level in 2022, with a total of 169,196 MKR tokens staked.

Voting will close at 12:00 p.m. ET on June 30, leaving only a short period for other members to choose a position, abstain, or decline to choose.

Once a selection is made, European wholesale lending firm Monetalis will provide MakerDAO with the financial instruments it wants. Monetalis CEO Allan Pedersen posted a “Signal Request” on the forum, showing the options his company could offer DAOs.

The company's goal is to transition to low-carbon resource efficiency as defined by the United Nations.

MakerDAO’s decision to invest such a large amount of funds was based on the suggestion of several members that deploying unspent funds could help increase the protocol’s floor price with minimal risk.

Sebastien Derivaux, a member of MakerDAO's strategic finance core, noted in a June 20 feasibility review that while the sums involved appear to be relatively high, it should be a safe bet for the DAO.

“In this case, the $500 million DAI investment is expected to remain liquid and low-volatility, and thus pose no significant risk to DAI’s peg and MakerDAO’s solvency.”

Derivaux said the two options currently being voted on are the best of the five options available for discussion.

Despite the landmark move, Maker is down 1.6 percent over the past 24 hours at $964.71, according to CoinGecko.