MakerDAO, the issuer of the stablecoin DAI, has taken the first step towards investing $500 million of its stablecoin holdings in short-term US government bonds and investment-grade corporate bonds.
Wednesday, the decentralized autonomous organisation (DAO) authorized a $1 million test transaction after a decision by its executive board. In the next few days, the whole investment will be made.
MakerDAO described the move as a means of bolstering the project’s financial sheet by increasing its exposure to low-risk liquid conventional assets. For this allocation, the DAO has teamed with the Monetalis asset management business. This company will serve as the asset adviser and provide a suitable legal framework for the Maker DAO protocol to obtain access to conventional assets.
Here, the DAO intends to invest 80% of the allotted amount in short-term US government bonds and the other 20% in corporate bonds.
During the voting process, the 80-20 split between treasuries and bonds remained the preferred method. This demonstrates the possibility connected with the shift, and it’s extremely great to have such staunch community support,” said Nadia Alvarez, the leader of MakerGrowth.
The distribution of $500 million in stablecoins by Monetalis will be split evenly between investment management companies Sygnum Bank and Baillie Gifford. MakerDAO said that this would occur in two stages.
In the first phase, the asset management company Sygnum will act as a crypto-to-fiat gateway and assist in the conversion of 250 million MakerDAO stablecoins into U.S. dollars, which will subsequently be invested in conventional assets.
DAI was created in 2017 by MakerDAO as a decentralized stablecoin backed by ether (ETH) and other crypto collaterals. MakerDAO has adopted a policy of diversifying its treasury into real-world assets during the last year.
According to CoinGeko statistics, DAI is the fourth-largest US dollar stablecoin with a market valuation of nearly $6.3 billion.