On March 16, MakerDAO, a lending protocol and stablecoin issuer, passed a proposal to increase its portfolio holdings of United States Treasury bonds by 150%, from $500 million to $1.25 billion. This move is intended to further diversify the protocol’s exposure to real-world assets and “high-quality bonds” following the recent market volatility that caused Dai (DAI) stablecoin losing its peg on March 11th.
The proposal was approved by 77% of Maker’s delegates with a debt ceiling hike totaling $750 million which will be purchased in equal maturities biweekly over six months; 12 slots at an amount of 62.5 million each for total yield expectations between 4.6%-4%. The revenue stream could also be boosted through trading costs associated with the purchase according to notes in their proposal documentations
This decision comes as part of Maker’s overall strategy shift towards more traditional asset classes such as US Treasuries while continuing development on DAI stability mechanisms like Multi Collateral Dai (MCD). With this new bond allocation it is expected that these moves may help reduce volatility within MCD while helping maintain liquidity for users who would otherwise struggle obtaining access during periods when markets are volatile or inaccessible due credit restrictions placed upon them by other institutions or services providers..
