MakerDAO, a decentralized autonomous group that points the DAI stablecoin, has voted in favor of allocating extra funds to its present US Treasury investments.
The rise in investments in authorities treasury bonds goals to diversify DAI’s stablecoin liquid backing by means of publicity to real-world property (RWAs).
MakerDAO Votes to Enhance Debt Ceiling by $750 Million
The primary stage of MakerDAO’s expanded foray into investing in RWAs has concluded with the passing of the preliminary vote to extend the DAO’s real-world asset vault debt ceiling to 1.25 billion DAI ($1.25 billion).
The governance ballot, which began on March 13, was lively for 3 days and ended on Thursday, March 16, 2023. Based mostly on the outcomes, nearly all of the votes were in favor of the proposal to lift the debt ceiling by $750 million. The debt ceiling in MakerDAO refers back to the most DAI that may be minted towards the collateral within the vault. The present for this vault is $500 million.
This concluded ballot is barely a preliminary vote. The matter shall be put to an government vote amongst DAO delegates. If it passes, it is going to be executed as a part of a future governance bundle.
MakerDAO started its RWA funding technique final yr with a $500 million allocation to U.S. Treasurys. This marked a departure from the protocol’s crypto-native lending technique since inception. A monetary assertion from earlier within the yr revealed that RWA-based investments contributed 70% of Maker’s gross income in December 2022.
Crypto Lending on the Brink?
MakerDAO’s pivot to RWAs comes because the crypto-native lending area took a battering in 2022. This got here amid a year-long bear market that noticed many members defaulting on large mortgage positions and going out of business. This sector of the market additionally appeared to have been hardest hit by the Terra and FTX collapses that exacerbated the bear decline
CeFi lenders similar to Voyager and Celsius have gone bankrupt. In the meantime, they aren’t alone on this turmoil, as a number of Solana-based crypto lenders have additionally sundown their frontend platforms, resulting in fears that the Solana DeFi ecosystem is perhaps heading to zero.
Regardless of this, DeFi lenders are nonetheless seeking to make progress. Each Aave and Compound have launched multichain upgrades of their lending protocols. These platforms are anticipated to play a big position within the liquid staking derivatives market that might emerge following the activation of staked ether withdrawals after Ethereum completes its Shanghai improve.
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