Maker passes first vote to increase U.S. Treasury bond holdings to $1.25B
According to a Twitter thread, Maker’s governance community initially voted in favor of increasing its holdings of US Treasuries to $1.25 billion. March 15th.
Preliminary vote approves bond purchase
If the proposal is later fully approved, Maker would more than double its current $500 million Treasury holdings to $1.25 billion.
Maker initially began investing in US Treasuries in October 2022 through an improvement proposal called MIP65. The latest proposal raises the debt ceiling for these investments, thereby increasing the amount makers can invest in liquid bonds.
Maker says the $750 million made available through the proposal will be spent on US Treasuries whose maturities are split evenly over six months. With this approach, US Treasuries will mature every other week, and in one go he will be $62.5 million.
The proposal to raise the debt ceiling passed with 77.13% (76,936 MKR) of the votes in favor of the change and 22.86% (22,799 MKR) of the votes against the change. A minority of votes (12 MKR) abstained from voting either way on this issue.
Prominent voters include cryptocurrency product company GFX Labs, London Business School Blockchain, analytics firm Flipside Crypto, and ConsenSys.
Maker Governance must approve the change at another board vote at a later date.Updates are then deployed directly to the Maker Protocol
Recovery from Maker’s DAI depeg
Maker’s decision to invest in government bonds is linked to an attempt to build resilience after the decentralized stablecoin DAI temporarily lost parity with the dollar.
DAI recovered to $1.00 on March 13 after falling to $0.89 on March 11. This depeg was primarily caused by the collapse of Silicon Valley Bank, which impacted Circle’s USDC stablecoin, but also other major stablecoins. DAI was particularly affected as he uses the DAI-USDC swap on the Peg-Stability Module (PSM).
To diversify from USDC, the project will invest a portion of USDC into PSM to acquire a $750 million Treasury bond to be purchased.
