How Maker will use U.S. Treasuries to buy Ethereum

Maker, the project behind the largest decentralized stablecoin DAI, has recently been heavily involved in the centralized finance industry with companies like Coinbase, Gemini and Coinshares. He has also reportedly purchased U.S. Treasuries and corporate bonds from BlackRock.

According to a Decrypt article, Gemini offered to pay Maker 1.25% on every GUSD that existed on Maker’s Peg Stability Module (PSM). Coinbase Prime also sought to pay 1.5% on USDCs used as collateral behind DAI. It is important to note that the PSM is a giant pool of assets that helps Maker maintain a $1 DAI parity.

“Since we would like to see the use of GUSDs increase on the chain, we propose that this business incentive be credited only if the average monthly balance of GUSDs in the MSP is greater than or equal to $100 million for the month” said Tyler Winklevoss, CEO of Gemini.

In June, the project’s DAO voted to invest $400 million in U.S. Treasuries, with the remainder spread among various iShares ETFs.

Considering that USDC is a centralized stablecoin launched by Circle and Coinbase, DAI has been heavily criticized for being exposed to it.

Interestingly, Maker has made several efforts to become fully decentralized, with project founder Rune Christensen removing ties to centralized assets in a move dubbed “ENDGAME“.

The idea is to get involved in projects that cannot be banned like Ethereum rather than USDC. His “ENDGAME“would be divided into three parts, the current part being called “Pigeon Stance“. The process is expected to take three years. It aims to generate enough return on each idle fund to buy more ETH. Christensen explained that the name “Pigeon Stance“

“is inspired by the evolutionary advantage of pigeons: Low fear of humans makes it much easier for them to scavenge food scraps in cities, allowing them to breed en masse“, he said.

Within three years, growth will continue as long as there is no immediate risk, Christensen said. Regardless, the project will move to the next phase as soon as a risk appears. The next phases are Eagle and Phoenix. Eagle focuses on balancing growth and resiliency in addition to a maximum of 25 percent exposure to a real-world asset. Phoenix is also characterized by maximum resilience to the threat of authoritarian attacks. In this case, there is no exposure to significant real-world assets.