MakerDAO Proposal to Raise Real-world Asset Vault Debt Veiling Overcomes First Hurdle – CryptoMode

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Mak­er­DAO, a decen­tral­ized autonomous orga­ni­za­tion that issues the DAI sta­ble­coin, has seen favor­able votes for its pro­pos­al to increase the DAO’s real-world asset vault debt ceil­ing from $500 mil­lion to $1.25 bil­lion. This move aims to diver­si­fy DAI’s sta­ble­coin liq­uid back­ing through real-world assets (RWAs) exposure.

The pre­lim­i­nary vote to increase the debt ceil­ing to 1.25 bil­lion DAI ($1.25 bil­lion) began on March 13 and last­ed three days, con­clud­ing on March 16, 2023. Most of the votes favored the pro­pos­al to raise the debt ceil­ing by $750 million.

It should be not­ed that this poll is only a pre­lim­i­nary vote. After that, the mat­ter will be put to an exec­u­tive vote among DAO del­e­gates. Final­ly, it will be exe­cut­ed as part of a future gov­er­nance pack­age if it passes.

Mak­er­DAO ini­ti­at­ed its RWA invest­ment strat­e­gy in the pre­vi­ous year with a $500 mil­lion allo­ca­tion to U.S. Trea­suries. That marked a devi­a­tion from the protocol’s cryp­to-native lend­ing strat­e­gy since inception. 

The finan­cial state­ment from ear­li­er this year revealed that RWA-based invest­ments con­tributed 70% of Maker’s gross rev­enue in Decem­ber 2022.

The shift towards RWAs came amid a dif­fi­cult time for the cryp­to-native lend­ing space in 2022. Many par­tic­i­pants default­ed on large loan posi­tions and went bank­rupt due to the year-long bear mar­ket. Addi­tion­al­ly, the Ter­ra and FTX col­laps­es heav­i­ly impact­ed the sec­tor, which exac­er­bat­ed the bear decline.

Oth­er DeFi plat­forms are expect­ed to play a sig­nif­i­cant role in the liq­uid stak­ing deriv­a­tives mar­ket that could emerge fol­low­ing the acti­va­tion of staked ether with­drawals after Ethereum com­pletes its Shang­hai upgrade.

CeFi lenders, such as Voy­ager and Cel­sius, have gone bank­rupt, and sev­er­al Solana-based cryp­to lenders have also sun­set their fron­tend plat­forms. This devel­op­ment has led to fears that the Solana DeFi ecosys­tem might be head­ing to zero.

The gov­er­nance poll’s pass­ing is a promis­ing devel­op­ment for Mak­er­DAO, mark­ing the first stage of the DAO’s expand­ed invest­ment in RWAs. 

If the exec­u­tive vote also pass­es, it will increase the DAO’s real-world asset vault debt ceil­ing to $1.25 bil­lion, diver­si­fy­ing DAI’s liq­uid back­ing and posi­tion­ing Mak­er­DAO for growth in the DeFi landscape.

None of the infor­ma­tion on this web­site is invest­ment or finan­cial advice and does not nec­es­sar­i­ly reflect the views of Cryp­to­Mode or the author. Cryp­to­Mode is not respon­si­ble for any finan­cial loss­es sus­tained by act­ing on infor­ma­tion pro­vid­ed on this web­site by its authors or clients. Always con­duct your research before mak­ing finan­cial com­mit­ments, espe­cial­ly with third-par­ty reviews, pre­sales, and oth­er opportunities. 

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