MakerDAO, a blockchain protocol, is strategically positioning itself as a frontrunner in the real-world assets (RWA) sector, gaining significant attention in the crypto industry recently.
According to blockchain analytics firm IntoTheBlock, MakerDAO has strategically diversified its revenue by incorporating US Treasury bonds into its portfolio.
RWA Is a Large Portion of Maker DAO’s Income
A recent market report by IntoTheBlock suggests that Maker DAO’s choice to invest in a significant amount of US Treasuries in June 2023 appears to yield positive results. Indeed, it positions Maker DAO at the forefront of the real-world assets sector in the cryptocurrency industry.
RWAs represent on-chain counterparts of physical assets or traditional finance assets, encompassing a broad spectrum ranging from real estate and bonds to invoices.
“It is this strategy that has fueled positive price movement for MKR, leading yearly returns amongst top RWA protocols. It is also no surprise that MKR comes out on top in terms of average transaction volumes, reaching a daily average volume of $94.5M during the second week of January,” analysts at IntoTheBlock wrote.
Read more: RWA Tokenization: A Look at Security and Trust
IntoTheBlock highlights that the strategy has solidified the consistency of Maker DAO’s revenue streams. Subsequently yielding in excess of $100 million in annualized revenue. Last year, real-world assets were a also significant revenue driver for MakerDAO, accounting for approximately 80% of its fee income.
Maker DAO breaks down its collateral RWA into four sections: cashlike, clean money, miscellaneous, and physically resilient. Therefore, there will be a significant crackdown on using RWA in the future.
“Cashlike refers to centralized stablecoins such as USDC and short-term government bonds. Clean money includes assets related to renewable energy projects, nuclear energy, sustainable agriculture, etc. Miscellaneous are all other real-world asset collateral including ERC-20 tokens such as WBTC, security tokens, and L1 bridge tokens. Physically resilient RWA are real-world assets that cannot easily be seized,” Makar DAO noted.
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