MakerDAO, the governing body of the Maker Protocol, has taken the first step of its plan to reallocate $500 million of its stablecoin Dai ( DAI $1.00 Dai +0.01% MARKET CAP $6.32b VOL. 24H $3.35m DAI $3.35m
The decentralized autonomous organization (DAO) voted on Oct. 6 to approve a pilot transaction of $1 million following an executive vote from Maker ( $865 Maker +2.62% MARKET CAP $845.67m VOL. 24H $4.96m MKR $5.84k
A majority, 80% of the $500 million, will be invested in short-term U.S. Treasurys, with $160 million allocated to the 0-1y US Treasury iShares ETF, and $240 million invested into the 1-3 year U.S. Treasury iShares exchange-traded fund (ETF) from BlackRock.
The final $100 million will be allocated to investment-grade corporate bonds provided by investment management firm Baillie Gifford.
The asset allocation was determined by the MKR holders, with 68,250 MKR representing 57.67% of the total voting pool opting for the 80-20 split.
MakerDAO has pursued the plan as a way to diversify the holdings currently collateralizing DAI while allowing the DAO to deploy unused funds and provide the protocol with additional yield without significant risk to the DAI peg or the solvency of MakerDAO.
DAI is the stablecoin used by MakerDAO to allow the decentralized finance (DeFi) protocol to lend money to users so that the repayable amount can avoid being subject to the volatility that is often seen within crypto markets.
Most of DAI’s $9 billion collateralization pool is currently made up of USD Coin ( $1.00
Related: Ooki DAO members explore options in response to CFTC lawsuit
While fixed-income investments offer a low rate of return, they are traditionally seen as a “safe haven” for conventional investors during bear markets due to their steady income stream and also because fixed-income investors are reimbursed before equity shareholders in the event of bankruptcy.
The announcement on Oct.6 pushes DAI in a different direction from recent comments from MakerDAO’s co-founder Rune Christensen on Aug. 27, who recommended the depegging of DAI from USDC and transitioning into a truly decentralized cryptocurrency amid fears of regulatory crackdowns.