Source: www.ledgerinsights.com
Digital asset bank Sygnum announced that it is the lead partner in a $500 million asset diversification by the Maker protocol, the DeFi initiative known for the DAI stablecoin. Eighty percent will be invested in BlackRock ETFs.
Maker has been investing in real-world assets for years, but has ramped up its activities this year. In August, it announced a $100 million financing of loan participations with Philadelphia-based Huntingdon Valley Bank. Societe Generale Forge has also been discussing a $30 million refinancing of a covered bond that was issued as a security token.
Regarding today’s news, Maker plans to invest the first $250 million tranche in BlackRock’s iShares fixed income ETFs, particularly those focused on short-dated Treasuries. The future plan is for Baillie Gifford to manage another $150 million in BlackRock Treasury ETFs and $100 million in corporate bonds.
There is more than $6.7 billion worth of DAI stablecoins in circulation, backed by $9.1 billion in collateral. A considerable portion of that collateral is invested in the USDC stablecoin which does not provide a return.
In a bit of irony, BlackRock is an investor in Circle, the company behind USDC. And BlackRock ETFs will be bought by selling USDC.
“This portfolio diversification tangibly demonstrates the innovation and real-world benefits that traditional assets are bringing to the DeFi-enabled financial revolution,” said Rajiv Sainani, Growth Lead at MakerDAO Europe.
“The end-to-end solution to the deal required a counterparty with a banking license that could acquire the ETFs and also provide institutional-grade custody for crypto and traditional assets. Sygnum’s DeFi credentials, regulated banking expertise, and traditional two-way crypto financial bridge were seen as critical to securing overwhelming support from the Maker community.”
As a decentralized protocol governed by a decentralized autonomous organization (DAO), decisions like this are put to a community vote. There were votes on whether to go ahead with the $500 million diversification and on the composition of assets. The proposal was initiated by Monetalis, a wholesale lender. For his efforts, he earns 0.15% of assets annually or $750,000.
Sygnum has a banking license in Switzerland and a capital markets license in Singapore. In January, it raised $90 million at a valuation of $800 million. The bank has been involved in multiple security tokenization initiatives and operates a digital asset fund together with Japan’s SBI and Italy’s Azimut.
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