- Partnering with Monetalis, MakerDAO will be using its stablecoin reserves to invest in US Treasuries and corporate bonds.
- $1 million has been set for the pilot transaction, following which the debt ceiling will rise to $250 million and $500 million.
- MakerDAO’s MKR has been one of the best performers in the crypto market, increasing by 43.62% in the span of two weeks.
Mainstream finance institutional investors have known to be big players in the crypto industry, but MakerDAO is about to become the first entity to do it the other way around. With a new Executive Vote live on MakerDAO Governance, the DeFi protocol is looking to invest its reserves into some of the more traditional investment options.
MakerDAO makes a big splash
The proposal highlighted various steps taken by MakerDAO, including the approval for a $1 million pilot transaction. This transaction will be used for the initial onboarding of Monetalis Clydesdale. Should this be successful, the debt ceiling will rise to $250 million in DAI, MakerDAO’s algorithmic stablecoin.
In all, about $500 million have been allocated for Monetalis and will be used to invest in short-term Treasury bonds as well as investment-grade corporate bonds. The reason behind this had been given as a mean of strengthening DAO’s balance sheet with exposure to low-risk liquid assets in TradFi.
Of the allocated $500 million, 80% will go to the US Treasury bonds, while the rest of the 20% will be used for corporate bonds. Management firms like the Sygnum Band and Bailie Gifford are going to receive equally divided amounts in DAI over two phases.
The first phase will focus on Sygnum, which will act as a crypto-to-fiat gateway and convert $250 million worth of DAI into USD. This money will be used to invest in assets within the traditional market.
MakerDAO on the charts
MKR, the governance token of the Maker ecosystem, holds a lot of value for its investors. Thus, decisions affecting the protocol would be reflected in the token’s price as well. Fortunately for MKR, things have been going well, with the asset marking one of the best performances in the last few days.
Over the past two weeks, MKR’s price has risen by over 43%, with the cryptocurrency trading at $846, up from $591.
Maker 24-hour price chart
The demand for the token has put significant buying pressure on MKR, and the cryptocurrency is on the verge of being overbought. If the Relative Strength Index (RSI) crosses the 70.0 threshold, a downward correction could take place.
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