MakerDAO Could Allocate $100 Million to Tokenized Treasury Bonds

The DeFi giant could soon begin testing tokenized versions of U.S. Treasury bills to push Asset-Liability management to the next level.

Steakhouse Financial, core strategic finance member of the Maker Protocol’s decentralized autonomous organization (DAO) proposed investing in on-chain tokenized T-Bill products and allocating up to $100 million towards the experiment.

In a governance forum post on Thursday, Steakhouse proposed that the move would bring higher transparency, simpler accounting, less complexity and quicker redemptions to MakerDAO. 

“We suggest that MakerDAO consider allocating up to 100M to develop and experiment with tokenized T-Bill products,” said Steakhouse.

In particular, the strategic finance unit is looking into three types of tokenized products, which would each serve a different purpose. One of these products would be lending protocols that used tokenized T-Bills as collateral. A key feature of this investment would be that the value of the investment only goes up, removing the risk of selling at a bad time. 

Using Flux fDAI as an example, Steakhouse said this product would be “perfect as the first line of defense of the peg to absorb daily fluctuations of the demand for DAI.” 

A second example would be frictionless products like Maple Finance’s USDC, which would provide better rates despite the lack of a minting and burning facility. The last category would be those that take transaction fees and have some price volatility.

“Good examples here are bIB01 and bIBTA from Backed Finance. Those would be kept as backbone and sold last (or used on lending markets to borrow USDC),” said Steakhouse.

MakerDAO’s real world assets (RWA) portfolio now stands at over $2.5 billion and accounts for 58% of its revenues, according to data from Dune.