MakerDAO invents the “decentralized” stablecoin with reserves in US Treasury bonds
The sirens of ease – Times are difficult for the steadycorners, scrutinized closely from the UST disaster of Terra (LUNA). The community of MakerDAO (MKR) thus seems to prefer play it safe rather than the decentralization. It will indeed cover itself with bond debt issues from the United States.
For MakerDAO, cryptos are good, but US Treasuries are better
In its early days, the issuance of the stablecoin DAI of the project MakerDAO was only done by putting in return only and only ethers of the Ethereum (ETH) network. Afterwards, many other crypto-assets have added themselves as possible collateral to the borrowing of this stablecoin from the US dollar.
The last governance vote from MakerDao will this time take the project out of the crypto-asset sector, preferring a classic pillar of good monitoring traditional finance. Good centralized so. Indeed, the Decentralized Autonomous Organization (DAO) has approvedthis October 6, 2022, a million dollar pilot deal to buy US treasury bonds (T-bills).
Ultimately, it is a total objective of $500 million investment in short-term US bond debt that the MakerDAO teams would like to lead, as well as in corporate bonds. In a proportion of 80% for T-bills, and 20% for corporate debt issues.
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Separating from the USDC to finally rush into the arms of Uncle Sam?
MakerDAO’s decision, which will create a pressure way additional from the USA on the stablecoin protocol, is in total opposition to its decentralization plan from last August.
Indeed, following the legal harassment of American regulators against the Tornado Cash Mixer (led by a department of the Treasury Department), the MKR project was concerned about his addiction to Circle. Indeed, the stablecoin USDC of Circle then represented more than 50% DAI collateral crypto-assets.
The fear of “regulatory repressions” would she have already given up Christensen Rune, co-founder of MakerDAO? At the time, however, he seemed to be leaning towards decentralization (the original objective of the DAI), rather than what he called “path of compliance”.
The siren song of the safe investment (risk-off) represented by US bonds in periods of strong economic tensions seems to have tipped the balance in that other direction. The DAI will very soon be faced with two choices. Stay free in the harshness of the crypto market wilderness, or prefer reassuring leash and collar of traditional finance.
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