DAI’s Real-World Backing: MakerDAO Acquires $700M In US Treasuries For Collateralization

MakerDAO announced on Wednesday a significant addition of $700 million in U.S. Treasury bonds to its holdings, which took its total bond holdings to $1.2 billion, a move aimed at backing DAI with real-world assets.

MakerDAO is a Defi lending protocol and the company behind the DAI (CRYPTO: DAI) stablecoin.

This development followed the MakerDAO community’s approval to raise the debt ceiling and it was facilitated through Monetalis Clydesdale Vault.

The first round of bond purchases occurred in 2022 when the community sanctioned a $500 million debt ceiling specifically for U.S. Treasury bonds.

A subsequent approval in March 2023 enabled an increase of $750 million, raising the total debt ceiling to $1.25 billion.

Monetalis Group CEO Allan Pedersen commended MakerDAO’s proactive approach, saying MakerDAO holds a prominent position in the DeFi landscape and has accumulated substantial funds in its peg stability module, which is crucial for DAI’s stability.

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The acquisition of U.S. Treasury bonds is a strategic diversification of its collateral pool, and according to Pedersen, “Maker is taking advantage of the current yield environment and putting its assets to work.”

Amidst the current market conditions, the Clydesdale Vault has managed to secure yields ranging between 4% and 5%.

“By pursuing a diversified portfolio approach, Maker enhances the robustness of its platform and stablecoin while also generating new means of revenue to continue to attract participants to Maker and the wider DeFi ecosystem,” he said.

MakerDAO recently approved an executive vote to hike its DAI Savings Rate (DSR) from 1% to 3.49%. This increment presents appealing yield prospects for DAI holders.

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