MakerDAO’s $1B Tokenized Treasury Investment Plan Draws Interest from BlackRock’s BUIDL, Ondo, Superstate

• MakerDAO announced on Thursday an open competition to invest $1 billion in tokenized U.S. Treasury offerings.

• Top issuers such as BlackRock-Securitize, Ondo Finance and Superstate are planning to apply, they told CoinDesk.

Crypto lending platform MakerDAO, the protocol behind the $5 billion stablecoin DAI, is planning to invest $1 billion of its reserves in tokenized U.S. Treasury products. Top players in the space including BlackRock’s BUIDL, Superstate and Ondo Finance are lining up to apply for the proposal.

“We think this is a very good move from MakerDAO and we are excited to participate with Blackrock’s BUIDL,” Carlos Domingo, CEO of tokenization platform Securitize, BlackRock’s issuance partner, said in an email to CoinDesk. “As the leading tokenized treasury issuer, we will certainly apply.”

“Superstate’s USTB is an ideal partner for MakerDAO,” Robert Leshner, founder of Superstate, told CoinDesk. “We’re excited that MakerDAO is creating an open process where we can introduce USTB to the community.”

Ondo Finance (ONDO), the $550 million RWA platform, also plans to participate. “It’s a natural fit in our mission of bringing institutional-grade financial products and services to everyone,” Nathan Allman, founder of Ondo Finance, said in a Telegram message. “We look forward to participating.”

MakerDAO’s plan means a significant reshuffle of its reserve strategy as the protocol, one of the first players in decentralized finance (DeFi), ushers into a next era under founder Rune Christensen’s Endgame Plan. The protocol has spearheaded crypto’s real-world asset (RWA) trend, backing its decentralized stablecoin in part by U.S. government bonds and bills held off-chain with a range of partners.

The open competition called “Spark Tokenization Grand Prix” to allocate $1 billion to tokenized offerings was announced on Thursday at ETHCC in Brussels, Belgium and also outlined in a Spark SubDAO governance post.

Spark Protocol is a lending platform build on top of Maker, and is “poised to become the central hub for RWAs on Maker and Ethereum,” the announcement said. It’s led by the Spark SubDAO, a smaller decentralized autonomous organization within MakerDAO.

Applications will open on August 12 with more details about the competition coming in the next weeks, the post said.

The investment will be funded from redirecting reserves from the Clydesdale facility managed by Monetalis and the Andromeda facility by BlockTower, Sebastien Derivaux, co-founder of Steakhouse Financial, a DeFi consulting firm that was also the author of the tokenized treasury proposal.

Monetalis will offboard MakerDAO after community backlash for failing to present adequate reporting about the reserves in a timely manner.

Big boost for tokenized treasuries

MakerDAO’s investment would mean a huge boost for the tokenized real-world asset protocols due to its sheer size.

U.S. Treasuries have been at the forefront of tokenization efforts of digital asset firms and traditional financial institutions alike. These products are attractive for protocol treasuries as a low-risk instrument where they can park their blockchain-based cash and earn a stable yield without leaving the blockchain ecosystem.

The market for these products tripled in a year to $1.85 billion, according to data provider rwa.xyz.

MakerDAO’s allocation would mean another 55% growth.

This is not the first similar action, though.

ArbitrumDAO, an ecosystem development organization of Ethereum layer-2 Arbitrum, finalized a similar contest called STEP on Thursday to allocate the equivalent of 35 million of Arbitrum’s native tokens (ARB) – roughly $27 million worth – in tokenized offerings.

UPDATE (July 12, 17:39 UTC): Adds details about the investment plan and SparkDAO’s role.