Decentralized lending protocol, MakerDAO, has voted against crypto investment firm CoinShares’ proposal to invest between 100million and 500million worth of the community’s funds, into a portfolio of corporate debt securities and government-backed bonds for yield, as an investment strategy.
72.43% of the community votes went against CoinShares’ proposal to invest MakerDAO’s funds into various traditional assets. If the community had voted in favor of CoinShare’s proposal, the crypto investment firm would have provided “a variable APY above the SOFR interest rate (3.01% as of October 26, 2022) in the community’s preferred currency (DAI, USDC, USD…) to MakerDAO”, which would have been withdraw-able on-chain.
On the community board of MakerDAO, a few members explained why they voted against the proposal. A community member with the username “Feedblack Loops LLC” shared:
“Since governance has voted on excess USDC then available, going to just say no to proposals of this type moving forward until the house gets in order. Coinshares had many incongruencies up front but did a decent job of articulating confusing portions of their proposal. Optimistic for a revision / different approach.”
Another user by the name Llama, who also voted against the proposal, said: “We believe this proposal to be extremely beyond protocol risk tolerance.”
Related: MakerDAO co-founder Nikolai Mushegian dies at 29 in Puerto Rico
In October, the MakerDAO community approved the custodianship of $1.6 billion worth of the stablecoin USD Coin (USDC) with the institutional prime brokerage platform for crypto assets, Coinbase Prime. The custodianship was expected to allow the MakerDAO community to earn a 1.5% reward on USDC held with Coinbase Prime.
On Oct. 14, Cointelegraph reported that MakerDAO’s revenue plummeted in the third quarter of 2022, caused by a fall in loan demand and few liquidations, while expenses remained high.