- MakerDAO recently announced the extension of its US treasury bond investments.
- The extension is from $500 million to $1.25 billion.
- The strategy is expected to provide an annual yield of 4.6% to 4.5%.
MakerDAO recently announced the plans for the extension of its US treasury bond investments on Twitter. According to the details in the tweet, the proposal is set to expand the existing US Treasury bond investments from $500 million to $1.25 billion.
MakerDAO had deployed $500 million in short-term US Treasury bond ETFs. According to the documents, the investments have brought in $2.1 million as lifetime fees to the Maker Protocol in January.
Elaborating about their strategy, MakerDAO mentioned in the tweet:
According to the proposal, the strategy is expected to deliver a net annualized yield of 4.6% to 4.5% to the MakerDAO after custody and expected trading costs.
The latest proposal to extend the US Treasury bond investments was laid out by Monetalis.
Monetalis is the original creator of MIP65, and the new proposal involves the additional investment of $750 million into a 6-month US Treasury along with bi-weekly maturities.
MakerDAO also mentioned in the tweet that the proposed implementation of the proposal requires the MIP65 debt ceiling extension to go through an on-chain governance cycle. This includes a governance poll and an executive vote that are yet to be approved and implemented.
The actual timeframe of the proposal is to expand the bond into a 6-month US Treasury ladder strategy with a biweekly roll-over. The proposal highlights that this strategy will be a robust, flexible, and effective solution.
The added benefits include low cost, tax efficiency, inherent liquidity, strong yield characteristics, transparency in asset holdings, etc.
The new strategy will be implemented by Sygnum Bank under an execution mandate if the proposal gets the green light. However, the proposal has not yet received a green flag from the DAO.
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Source: https://coinedition.com/makerdao-plans-to-ramp-up-its-us-treasury-bond-investments-to-1-25b/