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DeFi

MakerDAO Surges: $100 Million Investment In RWAs Signals The Shift To Traditional Markets

September 15, 2023 - Around 2 mins mins to read

Key Points:

  • MakerDAO invested $100 million in RWAs through BlockTower Andromeda, primarily in short-term U.S. Treasury bonds.
  • Nearly 80% of MakerDAO’s revenue over the past year has been derived from RWAs.
  • The trend of transitioning to traditional assets is gaining traction in the crypto space.
MakerDAO, a leading project in the blockchain space, has made significant strides in the Real World Assets (RWAs) market. Recent data from makerburn reveals that MakerDAO has added $100 million in RWA assets within the past two days through BlockTower Andromeda.
MakerDAO Surges: $100 Million Investment in RWAs Signals Blockchain's Shift To Traditional Markets
MakerDAO Surges: $100 Million Investment In RWAs Signals The Shift To Traditional Markets 2

These investments primarily focus on short-term U.S. Treasury bonds, boasting an annual interest rate of 4.5%. This move brings MakerDAO‘s total RWA assets to approximately $2.713 billion.

Notably, on September 7, MakerDAO added $50 million worth of assets to the DAI escrow fund, reinforcing its commitment to RWAs. Impressively, nearly 80% of the platform’s fee revenue over the past year stems from real-world assets, cementing its position as the third-largest DeFi protocol by total value locked.

However, RWAs have sparked debate within the community. Last August, founder Rune Christensen proposed a 25% hard limit on the protocol’s real-world asset collateral, which includes centralized stablecoins. This proposal came in response to the U.S. Treasury Department’s sanctions against Tornado Cash, raising concerns about broader government campaigns against digital assets.

RWAs are on-chain representations of physical or traditional financial assets, encompassing real estate, bonds, and invoices. The trend of transitioning to traditional assets is gaining momentum, with projects like Frax Finance exploring income sources from Government Bonds.

Furthermore, an alliance dedicated to advancing Real World Asset applications in the blockchain space, featuring industry heavyweights like Coinbase, Aave, and Circle, has recently been established, underscoring the growing interest in this sector.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

DAI

MakerDAO

Rune Christensen

RWA

Avatar of Harold

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.
DeFi

MakerDAO Surges: $100 Million Investment In RWAs Signals The Shift To Traditional Markets

Key Points:

  • MakerDAO invested $100 million in RWAs through BlockTower Andromeda, primarily in short-term U.S. Treasury bonds.
  • Nearly 80% of MakerDAO’s revenue over the past year has been derived from RWAs.
  • The trend of transitioning to traditional assets is gaining traction in the crypto space.
MakerDAO, a leading project in the blockchain space, has made significant strides in the Real World Assets (RWAs) market. Recent data from makerburn reveals that MakerDAO has added $100 million in RWA assets within the past two days through BlockTower Andromeda.
MakerDAO Surges: $100 Million Investment in RWAs Signals Blockchain's Shift To Traditional Markets
MakerDAO Surges: $100 Million Investment In RWAs Signals The Shift To Traditional Markets 4

These investments primarily focus on short-term U.S. Treasury bonds, boasting an annual interest rate of 4.5%. This move brings MakerDAO‘s total RWA assets to approximately $2.713 billion.

Notably, on September 7, MakerDAO added $50 million worth of assets to the DAI escrow fund, reinforcing its commitment to RWAs. Impressively, nearly 80% of the platform’s fee revenue over the past year stems from real-world assets, cementing its position as the third-largest DeFi protocol by total value locked.

However, RWAs have sparked debate within the community. Last August, founder Rune Christensen proposed a 25% hard limit on the protocol’s real-world asset collateral, which includes centralized stablecoins. This proposal came in response to the U.S. Treasury Department’s sanctions against Tornado Cash, raising concerns about broader government campaigns against digital assets.

RWAs are on-chain representations of physical or traditional financial assets, encompassing real estate, bonds, and invoices. The trend of transitioning to traditional assets is gaining momentum, with projects like Frax Finance exploring income sources from Government Bonds.

Furthermore, an alliance dedicated to advancing Real World Asset applications in the blockchain space, featuring industry heavyweights like Coinbase, Aave, and Circle, has recently been established, underscoring the growing interest in this sector.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.