DeFi seduced by the favorable returns of TradFi?

The autonomous organization MakerDAO could invest 750 million dollars in additional U.S. Treasury Bills. The proposal aims to take advantage of a favorable yield environment.

Would the most profitable option for DeFi currently reside on the side of the traditional finance and its historical products? This is what the proposal reviewed by MakerDAO seems to indicate.

The decentralized organization of Maker protocol (stablecoin issuer DAI) could be brought to invest 750 million dollars of its cash in U.S. Treasury bonds.

1.25 billion in US Treasury bills

In October, MakerDAO already approved an investment of this nature in the amount of $500 million. If the proposal were accepted, the total invested in a TradFi product would rise to 1.25 billion.

The investment strategy The investment strategy under consideration calls for investing in six-month Treasury bills via a laddering method. Purchases would be made on a biweekly basis.

The sponsor of this project, the decentralized finance asset manager Monetailsidentifies several advantages. The T-bill option “is a strong, flexible and efficient solution for Maker,” says CEO Allan Pederson.

Low cost and tax efficiency as benefits

The advantages of this investment strategy would be its low cost and tax efficiency, while meeting the primary objective of guaranteeing liquidity for Maker. It would also be an opportunity to take advantage of a favorable environment in terms of yield.

In the current climate, the crypto finance certainly offers returns, but at a much higher level of risk. And Monetails isn’t the only one within DeFi to advocate buying bonds.

According to its boss, the crypto investment firm BlockTower is expected to support a comparable proposal to the Maker DAO in the near future. These discussions thus highlight the interest in developing bridges between DeFi and TradFi.

Fostering capital exchanges between DeFi and TradFi

This is in fact the policy defended by the CEO of SG-Forge recently to RoyalsBlue.com. Last summer, Société Générale used MakerDAO to refinance a bond issued in the form of security tokens.

For the executive, the interest of a junction between crypto and TradFi is mutual. He reminds us that the ecosystem suffers “from a lack of good quality assets. Most of the corners that are currently trading are highly volatile and inherently risky.”

TradFi is therefore a source of “quality assets, such as OFH Tokens, which are themselves collateralized by real estate loans and highly rated” for the crypto ecosystem, which would therefore express “a great appetite” for these tokens.

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