(Bloomberg) – One of the initial decentralized finance protocols set up to challenge the legacy banking system was to move $500 million into short-term US Treasuries and corporate bonds.
MakerDAO, the so-called decentralized autonomous organization that powers the cryptocurrency stablecoin DAI, is shifting $500 million worth of tokens to fixed income obligations, capital has traditionally been a haven for the casual investor in turbulent times.
The move is aimed at diversifying MakerDAO’s balance sheet, limiting exposure to any assets and expanding revenue, according to a DAO statement on Thursday. The allocation of DAI will boost the usability of digital assets in the traditional space, extending DAI’s influence beyond cryptocurrencies, the statement said.
The community behind MakerDAO, founded in 2015, has agreed to put 80% of the funds into short-term Treasuries and 20% into investment-grade corporate bonds, after an initial vote was given at the end of June. The initial $1 million rollout has now been completed by DeFi asset advisor Monetalis.
DeFi, which has been successful in the last bull market, has faced challenges this year as the prices of the tokens that underpin the system plummet and the sector continues to suffer. affected by hacks. Many projects have sought to develop strategies for survival. Lido, another DeFi startup, recently sold its native tokens to venture capital firm Dragonfly to cover expenses for two years.
MakerDAO’s shift comes just months after another decentralized stable, TerraUSD, suffered a major crash. Unlike TerraUSD, which uses an algorithmic model to keep its exchange rate to the dollar, MakerDAO’s stablecoin DAI is issued on an over-collateralized basis. Previous discussions suggested that investments in Treasuries and short-term bonds would not affect DAI’s exchange rate to the dollar.