MakerDAO likely to spend $100 million on development and testing of tokenized US Treasury bonds

  • MakerDAO’s core member of strategic finance has proposed allocating $100 million in funding to US Treasury bond products.
  • The decentralized organization has invested $2 billion in short-term bonds after declaring its intent to invest in Treasury bills.
  • MKR's supply on exchanges is climbing steadily this week, while Maker price crumbles under selling pressure.

MakerDAO expressed its interest in acquiring US Treasury bills back in February 2022. Since then, the decentralized organization spent $2 billion purchasing short-term bonds.

A core strategic finance member of the DAO, Steakhouse, recently proposed spending $100 million on development and testing of US Treasury bond products, with mixed reactions from the community of members.

Also read: Vitalik Buterin could have fueled Shiba Inu price rally by burning $1.7 billion in SHIB

MakerDAO receives proposal to spend $100 million on tokenized US Treasury bonds

The MakerDAO community expressed mixed feelings about Steakhouse’s proposal to allocate $100 million to development and testing of tokenized US Treasury bond products. The rationale provided by the strategic finance core member is that tokenized T-bill offerings have expanded since MakerDAO first expressed interest in February 2022.

Exploring asset-liability management in such products is key to MakerDAO’s success, according to Steakhouse. The contributors of the strategic finance core unit state that the $100 million allocation is only a first step in tokenized T-bill products.

Community members expressed two key concerns:

  • $100 million is a large sum to invest in experimentation that is considered only preliminary or a “first step,” as described in the proposal
  • Massive regulatory risk by paving the way for sanctioned individuals to freely access a T-Bill-backed instrument without a whitelisting process

The MakerDAO community members in favor of the proposal asked for specific criteria or benchmarks to measure the success of the project and a dedicated timeline for implementation. 

MKR price faces selling pressure on centralized exchanges

MKR supply on exchanges dropped nearly 13% during the past weekend. However, based on data from crypto intelligence tracker Santiment, there has been a consistent increase in MKR supply on centralized exchanges this week.

MKR supply increased from 96,565 to 97,119 between September 4 and early on Friday. Typically, an increase in supply of the token fuels a bearish narrative for its price as larger volume of the asset is available for sale on centralized exchanges. 

MKR supply on exchanges vs price

MKR Supply on exchanges vs price

At the time of writing, MKR price is $1,140. he token is recovering from its August 31 intraday low of $1,031.

Bitcoin, altcoins, stablecoins FAQs

What is Bitcoin?

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.

What are altcoins?

Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.

What are stablecoins?

Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.

What is Bitcoin Dominance?

Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.

Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

Bitcoin tags $60,000 for the first time in more than two years

Bitcoin tags $60,000 for the first time in more than two years

Bitcoin hit $60,000 after more than two years below this level. BTC liquidations have surpassed $277 million in the last 24 hours. This massive rally in the pioneer cryptocurrency could be attributed to the spot ETF approval.

More Bitcoin News

Arbitrum price resumes rally with Web3 gameathon plan for March

Arbitrum price resumes rally with Web3 gameathon plan for March

Arbitrum, an Ethereum Layer 2 scaling solution, has announced an event for Web3 gaming. The event is likely to attract community members, delegates and Web3 gamers. This could positively influence Arbitrum adoption and is likely to boost ARB gains. 

More Arbitrum News

Ethereum price hits new yearly high at $3,369 as staked Ether rises to 26%

Ethereum price hits new yearly high at $3,369 as staked Ether rises to 26%

Ethereum price has climbed to a new 2024 high of $3,369 on Wednesday. Bitcoin’s rally to $59,000 and the upcoming Dencun upgrade activation on mainnet have likely catalyzed Ethereum’s price gains. 

More Ethereum News

XRP climbs to $0.58 as SEC pushes for deadline extension in Ripple lawsuit

XRP climbs to $0.58 as SEC pushes for deadline extension in Ripple lawsuit

XRP price rallied on Wednesday in response to the Securities and Exchange Commission’s (SEC) push to delay the remedies briefing deadline in its lawsuit against the payment remittance firm. 

More Ripple News

Bitcoin: BTC likely to correct to $50,000 soon

Bitcoin: BTC likely to correct to $50,000 soon

Bitcoin price has formed a potential top signal that forecasts a sell-off. The weekly chart also points to a bearish divergence, which adds credence to the bearish outlook. Investors can expect BTC to consolidate between the $52,062 to $45,160 levels.

Read full analysis