MakerDAO Embraces Real-World Assets

• MakerDAO members have agreed to invest $500 million worth of DAI in US Treasurys and corporate bonds.
• MakerDAO may soon be the first decentralized finance protocol to offer conventional loans to borrowers backed by traditional institutions.
• MakerDAO has already closed five deals for loans collateralized with real-world assets.
• Real-world assets now represent 75% of MakerDAO’s revenues.

MakerDAO Adopts Real-World Assets

MakerDAO, a token-powered system that supports borrowing and lending cryptocurrencies, is slowly embracing real-world assets. The latest MakerDAO governance proposals signal ways in which the protocol is moving in this direction. Last week, the DAO passed a proposal to invest $500 million worth of stablecoin DAI into US Treasurys and corporate bonds. This proposal was an attempt for the DAO to generate a yield from its DAI holdings with professional bond managers and to diversify counterparty risks, ultimately strengthening the DAO’s balance sheets.

Conventional Loans Backed by Traditional Institutions

MakerDAO may soon be the first decentralized finance protocol to offer conventional loans to borrowers backed by traditional institutions. This move comes as the demand for crypto leverage wanes and MakerDAO seeks to diversify its revenue streams. “Revenue coming from the real world can offset some of the revenue we’ve lost from crypto,” said MakerDAO’s TJ Ragsdale.

Real-World Deals

MakerDAO has already closed five deals for loans collateralized with real-world assets, starting with those backed by real estate for New Silver. Three of the deals aren’t live yet. The fact that an upstart DAO is getting deal flow with Europe’s seventh-biggest bank is an important moment in the development of DeFi. Real-world assets now represent 75% of MakerDAO’s revenues.