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Maker’s governance community has initially voted in favor of increasing U.S. Treasury bond holdings to $1.25 billion, according to a Twitter thread on March 15.
Preliminary vote approves Treasury bond purchases
The proposal, if it is fully approved at a later date, will see Maker more than double its current $500 million of Treasury bond holdings to $1.25 billion.
Maker initially began to invest in U.S. Treasury bonds in October 2022 through an improvement proposal called MIP65. The latest proposal increases the debt ceiling for those investments and thereby raises the amount that Maker can invest in liquid bonds.
Maker says that the $750 million made available through the proposal will be spent on U.S. Treasuries with maturities equally split over six months. This approach will ensure that the Treasuries mature on a bi-weekly basis, $62.5 million at a time.
The proposal to raise the debt limit was passed with 77.13% of votes (76,936 MKR) in favor of the change and 22.86% of votes (22,799 MKR) against the change. A small number of votes (12 MKR) abstained from voting either way on the matter.
Notable voters included the crypto product company GFX Labs, the London Business School Blockchain, the analytics firm Flipside Crypto, and ConsenSys.
Maker governance must still approve the change in a separate executive vote at a later date. The update will then be directly deployed to Maker Protocol
Recovering from Maker’s DAI depeg
Maker’s decision to invest in Treasury bonds is related to its attempts to become more resilient after its decentralized stablecoin, DAI, briefly lost parity with the dollar.
DAI fell as low as $0.89 on March 11 before recovering to $1.00 on March 13. That depeg was caused by the collapse of Silicon Valley Bank, which primarily affected Circle’s USDC stablecoin but also impacted other major stablecoins. DAI was specifically affected due to the fact that it uses DAI-USDC swaps in its Peg-Stability Module (PSM).
In order to diversify from USDC, the project will invest a portion of the USDC in its PSM to acquire the $750 million of Treasury bonds slated for purchase.
The post Maker passes first vote to increase U.S. Treasury bond holdings to $1.25B appeared first on CryptoSlate.
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