• MakerDAO voted in favor of increasing their existing US Treasury holdings.
• 70% of Maker’s total income was from RWA-based investments in 2022.
• DeFi lenders are pushing forward and making multichain enhancements available to users, such as the ability to withdraw staked Ether when Ethereum’s Shanghai upgrade is complete.
MakerDAO Votes in Favor of Increasing US Treasury Holdings
MakerDAO, the issuer of the DAI stablecoin, has voted in favor of increasing its allocation to existing US Treasury holdings. This follows an investment by MakerDAO last year into $500 million worth of U.S Treasuries which diversifies DAI’s liquid backing with exposure to real-world assets (RWA). In December 2022, 70% of Maker’s total income came from RWA-based investments.
Crypto Native Lending Affected By Bear Market
The crypto-native lending industry was hit hard during a year-long bear market which caused many people to fail on large lending holdings and declare bankruptcy. The bear drop was compounded by the Terra and FTX crashes which impacted this market segment particularly hard, leading some prominent names like Voyager and Celsius to fail. These events have led to fears that the entire DeFi ecosystem may collapse due to other crypto-based lenders discontinuing their frontend platforms.
DeFi Lenders Push Forward
Despite these events, DeFi lenders are still pushing forward with multichain enhancements being made available for users such as Aave and Compound protocols. When Ethereum’s Shanghai upgrade is complete, it will enable users with the ability to withdraw staked ether which will play a pivotal role in the resulting liquid staking derivatives market.
Increase in Government Treasury Bond Investments
This increase in investments in government treasury bonds aims to further diversify DAI’s stablecoin liquid backing with exposure to real world assets (RWA). Furthermore, switching from crypto native lending into RWAs allows greater protection against future market shocks thus providing stability for DAI holders within the protocol.
Overall, MakerDAO has taken steps towards protecting both themselves and their users against sudden drops or shocks within the cryptocurrency markets by diversifying their portfolio into RWAs like US Treasuries as well as adapting new features that allow more secure ways of investing such as withdrawing staked ether when Ethereum’s Shanghai upgrade is complete.