MakerDAO Looks to De-Risk, Swapping $500 Million in DAI for US Treasuries

MakerDAO, the governing body of the Maker Protocol, has launched a proposal in which members are voting to determine how to allocate US$500 million in treasury funds.

According to DAO members, they are seeking to de-risk by choosing between going 100 percent in US short-term treasuries or splitting a percentage into treasuries and longer term government bonds. At the time of writing, 100 percent into treasuries was the most voted decision.

Another proposal within the DAO is the collateral class for DAI, and so far 57 percent of voters have chosen a core crypto collateral between Ethereum (ETH) and Bitcoin (BTC):

Maker will reportedly control the funds provided by Monetalis, a European wholesale lender.

A Small Investment of $500M DAI

Sebastien Derivaux, a member of MakerDAO’s strategic finance core unit, said the US$500 million DAI investment was “expected to remain liquid and low volatility, [so] it is therefore not a significant risk for the DAI peg nor the solvency of MakerDAO”.

The crypto market’s ongoing turmoil has prompted Maker to carefully decide on how it will protect its community. While MKR, Maker’s utility token, buffed 50 percent after the Terra collapse, crypto lender Celsius – which is now on the brink of bankruptcy – borrowed 100 million DAI using ETH as collateral.

Celsius’s inability to repay borrowers has caused wider pain across the crypto market, causing it to shed more blood than it already has.