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The community overseeing MakerDAO, the decentralized autonomous organization (DAO) that created the stablecoin DAI, has allotted $500 million for corporate and short-term treasury bonds and US treasuries. The "strategic investment" would be transformed from its overcollateralized stablecoin, with 80% moving to short-term US Treasury securities and the remaining 20% to investment-grade corporate debt. The allocation suggestion, made in late June, received support from MakerDAO's community. Since the collapse of the $40 billion Terra ecosystem and its stablecoin UST, which sent a blast wave through the cryptocurrency market, stablecoins and their collaterals have been a topic of discussion.
DeFi Aims to Diversify DAO's Balance Sheet
Decentralized finance (DeFi) asset adviser Monetalis would start the process. It aims to diversify MakerDAO's balance sheet into scalable legacy finance investments, minimizing exposure to one asset and extending revenue sources. In a separate statement, digital asset bank Sygnum stated that it is the primary partner in the $500 million diversification initiative. According to MakerDAO, it has already met a $1 million transaction and will complete the remaining investment soon. According to Sygnum, working with BlackRock Switzerland, $250 million would be allocated in the first phase.
DAO Lacks Centralized Management
DAOs are organizations that lack a centralized management structure and rely on software administrators rather than people to make decisions. DeFi refers to any financial transactions conducted on a blockchain without the need for a traditional mediator, including lending, trading, and other financial operations. The initiative by the industry to offer additional stability to the tainted algorithmic stablecoins might be considered a successful illustration of decentralized governance involvement. The DAI stablecoin from MakerDAO is decentralized but also excessively collateralized due to ETH deposits made to its smart contracts.
MakerDAO to Promote Use of GUSD Stablecoin
Recently, Gemini has stated on the MakerDAO forum that by providing a predefined dividend on the GUSD amount in MakerDAO's vaults, the Gemini dollar (GUSD) stablecoin's adoption in the latter's ecosystem may be increased.