Maker's $1 Billion Investment Plan Attracts Attention from Major RWA Projects

The tokenized securities funds of BlackRock, Ondo, and Superstate are showing interest in Maker's $1 billion investment plan.

MakerDAO, the protocol managing the largest decentralized stablecoin, DAI, announced on July 12 its plan to invest up to $1 billion of reserve assets into tokenized securities funds.

This plan, named the “Spark Tokenization Grand Prix,” was unveiled by Maker at the EthCC[7] event for the Ethereum community taking place in Brussels, Belgium, this week. The funds will be allocated through the Spark Protocol, a lending protocol developed by Maker.

This initiative is a crucial part of Maker's Endgame strategy to revitalize the protocol, alongside other changes such as forming additional subDAOs with accompanying tokens, rebranding the MRK and DAI tokens, and deploying its own blockchain.

Recently, Maker has been a leading entity in the Real World Asset (RWA) trend by investing a significant portion of collateral backing DAI into yield-generating products like USDC stablecoin and short-term U.S. Treasury bonds through intermediaries such as Coinbase Custody, BlockTower, Monetalis, etc. As of the time of writing, the total value of these investments is $2.2 billion, accounting for 42% of the $5.2 billion backing DAI.

Stablecoin DAI activity metrics. Source: makerburn (07/13/2024)

List of tokenized securities products being invested by Maker based on DAI collateral. Source: makerburn (07/13/2024)

The Spark Tokenization Grand Prix will start accepting bids from institutions on August 12 to present how they will use the allocated funds and generate the best returns.

According to CoinDesk, Maker's proposal is drawing interest from major Real World Asset (RWA) projects, including BlackRock's BUIDL fund and Securitize, Ondo Finance, and Superstate.

Carlos Domingo, CEO of Securitize, stated: “We think this is a very positive move by MakerDAO and are eager to participate through BlackRock's BUIDL fund. As a leading issuer of tokenized securities, we will certainly apply.”

As reported by Coin68, BUIDL is currently the largest RWA fund in the market, with assets under management recently surpassing $500 million.

Similarly, Ondo Finance, a Real World Asset protocol that has garnered much attention lately, expressed its intent to partner with Maker. Nathan Allman, the project's founder, shared with CoinDesk: “Our mission is to bring institutional-grade investment products and services to retail users. So we will definitely participate.”

Robert Leshner, founder of Superstate, an RWA project with the USTB fund valued at nearly $100 million, also commented: “Superstate’s USTB would be an ideal partner for MakerDAO. We are very excited about the opportunity to introduce USTB to the community.”

Data from rwa.xyz shows that the tokenized securities market has tripled in the past year, reaching a market capitalization of $1.8 billion, led by products on Ethereum.

Market capitalization trends of the tokenized securities sector. Source: rwa.xyz (07/13/2024)

The largest tokenized securities funds at the time of writing. Source: rwa.xyz (07/13/2024)

Maker's MRK token price has surged nearly 8% in the past 24 hours following the announcement of the $1 billion investment plan into Real World Assets and the interest shown by major entities like BlackRock's BUIDL, Ondo Finance, and Superstate.

4-hour chart of the MKR/USDT pair on Binance at 10:30 AM on 07/13/2024