Maker passes first vote to increase U.S. Treasury bond holdings to $1.25B
Maker passes first vote to increase U.S. Treasury bond holdings to $1.25B Mike Dalton · 5 hours ago · 2 min read
An executive vote is required before the change is deployed to the DAI protocol.
2 min read
Updated: March 16, 2023 at 11:40 pm
Cover art/illustration via CryptoSlate
Maker’s governance community has initially voted in favor of increasing U.S. Treasury bond holdings to $1.25 billion, according to a Twitter thread on March 15.
Preliminary vote approves Treasury bond purchases
The proposal, if it is fully approved at a later date, will see Maker more than double its current $500 million of Treasury bond holdings to $1.25 billion.
Maker initially began to invest in U.S. Treasury bonds in October 2022 through an improvement proposal called MIP65. The latest proposal increases the debt ceiling for those investments and thereby raises the amount that Maker can invest in liquid bonds.
Maker says that the $750 million made available through the proposal will be spent on U.S. Treasuries with maturities equally split over six months. This approach will ensure that the Treasuries mature on a bi-weekly basis, $62.5 million at a time.
The proposal to raise the debt limit was passed with 77.13% of votes (76,936 MKR) in favor of the change and 22.86% of votes (22,799 MKR) against the change. A small number of votes (12 MKR) abstained from voting either way on the matter.
Notable voters included the crypto product company GFX Labs, the London Business School Blockchain, the analytics firm Flipside Crypto, and ConsenSys.
Maker governance must still approve the change in a separate executive vote at a later date. The update will then be directly deployed to Maker Protocol
Recovering from Maker’s DAI depeg
Maker’s decision to invest in Treasury bonds is related to its attempts to become more resilient after its decentralized stablecoin, DAI, briefly lost parity with the dollar.
DAI fell as low as $0.89 on March 11 before recovering to $1.00 on March 13. That depeg was caused by the collapse of Silicon Valley Bank, which primarily affected Circle’s USDC stablecoin but also impacted other major stablecoins. DAI was specifically affected due to the fact that it uses DAI-USDC swaps in its Peg-Stability Module (PSM).
In order to diversify from USDC, the project will invest a portion of the USDC in its PSM to acquire the $750 million of Treasury bonds slated for purchase.
Tron [TRX] plunges, longs liquidated, credit goes to ‘his excellency’
- The Tron native token experienced a major nosedive in quick succession.
- Liquidation hit a yearly high while the protocol’s founder looks for a way out.
Led by “his excellency” Justin Sun, Tron [TRX] has struggled to become a high-ranking cryptocurrency per its price. Moreso, the cryptocurrency had not been able to significantly pull itself out of anguish lately, despite its high market capitalization.
How much are 1,10,100 TRXs worth today?
Despite that, the native cryptocurrency of the decentralized blockchain-based operating system lost 7.43% in the last 24 hours. This decrease happened on account of the U.S. SEC probe of its founder.
Hands have been forced to abstain
Following the controversy, Tron’s Total Value Locked (TVL) lost its seven-day green momentum as it dropped 4.33%. The TVL measures investors’ interest in a particular blockchain or protocol. According to DeFiLlama, the Tron TVL dropped to $5.12 billion.
Although it was the same value as the Binance Smart Chain, the decline implied that the Tron blockchain quickly began to experience a lack of liquidity.
But this was expected as the “unregistered security” tag created dismay among investors who were initially willing to make smart contracts deposits.
Furthermore, the TVL was not the only casualty that felt the aftereffect of the SEC label. According to Coinglass, long-positioned traders also followed suit.
Information from the crypto derivatives platform showed that TRX’s total liquidations were as high as $2.09 million. Interestingly, $1.96 million out of this occurred within 12 hours as the development caught traders by surprise.
This wipeout was one that had not been recorded in a long while. A close examination of the data revealed that long liquidations on 22 March were $1.22 million.
However, TRX’s brief recovery seemed to have lowered the number at press time. And unfortunately, shorts who were late to the party have been handed the agony baton.
Is your portfolio green? Check the Tron Profit Calculator
Is partnership the way out?
However, Adam Cochran, an angel investor and a contributor at Synthetix [SNX], tweeted that he was not surprised by the development.
Cochran also opined that the Tron founder probably knew about the SEC issue before it went public. Hence, the reasons for dumping TRX and the BitTorrent [BTT] token.
Rumors we’re true then.
Sun immunity roasted.
Would expect his properties (Huobi, Poloniex and TrueUSD) all caught up in this? Maybe Tron and BitTorrent as well?
Explains why he was dumping his tokens and is probably going to push assets heavily into cash again. https://t.co/eFq6S4ekBf
— Adam Cochran (adamscochran.eth) (@adamscochran) March 22, 2023
Meanwhile, Justin Sun finally responded to the matter. His reply showed that he was dissatisfied with the SEC decision and he made his grievance known.
According to him, the complaint lacked merit. He backed up his stance, citing TRX and BTT adoption as legal tender in the Dominica Republic as backing.
The SEC’s civil complaint earlier today is just the latest example of actions it has taken against well known players in the blockchain and crypto space. We believe the complaint lacks merit, and in the meantime will continue building the most decentralized financial system.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 23, 2023
Nonetheless, Sun who also heads the Huobi Global team said he was open to talks with the regulator. He identified the early-day crypto regulation as a reason for repeated misunderstanding. Sun pointed out,
“We are eager to collaborate with governments and regulatory bodies globally that are dedicated to establishing transparent guidelines for regulating and working with the cryptocurrency industry given the important role it can play.”
Sushi DAO To Set Up Defense Legal Defense Fund; Project Receives Unspecified US SEC Subpoena
Sushi, the Web3 exchange that pivoted into a decentralized autonomous organization (DAO), is seeking to organize a legal defense fund. If approved, the proposal, which already is available for voting, will put $3 million USDT as part of a fund to defend itself from legal actions against the organization and its members. The organization disclosed it had recently received a subpoena from the U.S. Securities and Exchange Commission (SEC).
Sushi DAO Presents Proposal to Establish Legal Defense Fund
Sushi DAO, a Web3 exchange and staking platform, is seeking support to establish a legal defense fund in order to effectively take on legal cases that are already coming its way. The proposal, which is currently being approved with the support of 75% of the vote at the time of writing, would allow the organization to make use of $3 million USDT to help its maintainers to defend from demands and legal cases.
If approved, the fund would come from Kanpai, which is part of the treasury of the DAO, in 50%. The other 50% would be deducted from the Sushi fees and from the reserve destined for giving grants. If depleted, the organization would have to refund the initiative with $1 million USDT more until the end of the legal case.
Undisclosed SEC Subpoena Received
Jared Gray, head chef and main maintainer of the Sushi DAO, announced that he had received a subpoena from the U.S. SEC, but did not disclose the nature of the case the organization is facing. When questioned on the issue, Gray stated:
Unfortunately, I cannot speak publicly more than what was disclosed in the post, which is standard. Many DAOs will need or have implemented Legal Defense Funds for contributors.
Sushi follows in the footsteps of Makerdao, which also established a legal fund for covering similar expenses in December, with coverage of up to 5 million DAI. However, Makerdao’s proposal is more specific and includes definitions for beneficiaries and claims, as well as periods to make payments and determine eligibility for these protections.
This is not the first time that a U.S. government organization exerts legal action against a DAO. The Commodity Futures Trading Commission (CFTC) already did it back in September, alleging Ooki DAO had illegally offered trading services to U.S. citizens without having registered as a Designated Contract Market (DCM). The Ooki DAO case is still ongoing.
Tags in this story
What do you think about Sushi establishing a legal defense fund to protect its DAO and head chef Jared Gray? Tell us in the comment section below.
Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.
Image Credits: Shutterstock, Pixabay, Wiki Commons
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Arbitrum network activity booms ahead of airdrop
Arbitrum network activity booms ahead of airdrop Andjela Radmilac · 6 hours ago · 2 min read
Arbitrum saw a record number of daily transactions and unique addresses as the market gears up for the upcoming ARB airdrop on March 23.
2 min read
Updated: March 23, 2023 at 10:36 am
Cover art/illustration via CryptoSlate
Network activity on Arbitrum has been booming, with the popular Ethereum layer-2 solution seeing an unprecedented uptick in the number of transactions and addresses.
According to data from Arbiscan, the network processed over 1.3 million transactions on March 21 — up from 1 million transactions recorded on March 20. The sharp increase in the number of daily transactions began in late January and pumped further after Arbitrum announced a massive airdrop to its users.
The airdrop will see 1.27 billion ARB tokens distributed to users based on a Feb. 26 snapshot. The 1.27 billion ARB tokens represent 12.75% of the token’s circulating supply. Out of the 10 billion tokens, around 56% will be allocated to the community.
Set to take place on March 23, the airdrop will also see 112.8 million ARB tokens distributed to various DAOs in its ecosystem. The network said that this was a way to “empower the subcommunities” and entice them to participate in governance decisions once it fully transitions to a DAO.
Decentralized exchanges (DEXs) GMX and TREASURE would get 8 million tokens each, while Uniswap (UNI) and SushiSwap (SUSHI), would get 4.3 million and 4.2 million ARB tokens, respectively. MakerDAO, KyberSwap, DODO, Camelot, and 24 other projects would receive over 1 million ARB tokens.
The number of unique addresses on Arbitrum has also been growing rapidly. Since the beginning of the year, the network saw almost 1.5 million new addresses created.
Interest in Arbitrum has also gone up thanks to Coinbase following the announced that it would support its upcoming ARB token and list it for trading. Trading is expected to begin sometime after the airdrop once sufficient supply and liquidity conditions are met. The exchange said that the USD-ARB trading pairs will launch in phases and be considered “experimental.”
The Arbitrum frenzy also saw many users start selling wallets eligible for the airdrop. The current speculative value of ARB hovers around $1, but various IOU markets show that the token is expected to trade around $6 following the airdrop.
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