DeFi lending protocol MakerDAO to invest $500M in US government bonds
Of this investment, 80% will be invested in short-term US treasuries and 20% will be made in investment-grade corporate bonds.
Decentralised finance (DeFi) lending protocol, , announced on Thursday its plans to invest $500 million in short-term US treasury bonds and investment-grade corporate bonds. As per reports, a pilot transaction of $1 million has been completed.
Of this $500 million, 80% will be invested in short-term US treasuries and 20% will be made in investment-grade corporate bonds.
Earlier in June, MakerDAO's community had voted in favor of the allocation proposal.
As per reports, DeFi asset advisor Monetalis will oversee the conversion of $500 million worth of MakerDAO’s native stablecoin, DAI, into US dollars.
According to data by CoinGecko, DAI is currently the fourth largest stablecoin by market capitalization.
Earlier, in June, member of MakerDAO’s strategic finance core unit Sebastien Derivaux had posted a statement "An investment of 500M DAI in this context, that is expected to remain liquid and low volatility, is therefore not a significant risk for the DAI peg nor the solvency of MakerDAO."
However, since the collapse of the $40 billion Terra ecosystem and its stablecoin UST, stablecoins and their collaterals have been a subject of debate, since the crash shook faith of many investors and also led to several countries to consider stablecoin regulations.
Edited by Akanksha Sarma