MakerDAO, the decentralized organization renowned for its MKR token and DAI stablecoin, has unveiled an ambitious plan to allocate $1 billion to tokenized treasuries.

This move aims to onboard substantial tokenized assets and drive innovation within the industry.

Major Players Join MakerDAO’s $1 Billion DeFi Competition

In a detailed announcement on July 12, MakerDAO proposed the Spark Tokenization Grand Prix competition. This competition is set to commence on August 12, 2024.

It aims to onboard up to $1 billion of tokenized assets, particularly focusing on short-duration US Treasury Bills and similar products. The competition will evaluate participants based on several criteria, such as pricing, liquidity, and alignment, with SparkDAO’s strategic vision. The goal is to select proposals that drive innovation and financial inclusion within the DeFi ecosystem.

Read more: What is Tokenization on Blockchain?

Maker Governance will review the results and make the final onboarding decisions. Geographic and regulatory restrictions may also apply to ensure compliance with global financial regulations.

“Spark Protocol is poised to become the central hub for RWAs on Maker and Ethereum, driving innovation and financial inclusion. More details regarding how the competition will work and how proposals will be evaluated will be released in the coming weeks in advance of the application period opening,” the announcement reads.

The Spark Tokenization Grand Prix has already garnered significant attention from prominent tokenized treasury bill issuers. In an email to BeInCrypto, Superstate’s representative expressed its intent to participate with its flagship product, USTB.

MakerDAO’s initiative mirrors recent moves in the broader DeFi industry. For instance, earlier in June, the Arbitrum STEP Committee recommended diversifying 35 million ARB tokens ($24.5 million) from Arbitrum DAO Treasury into six selected products. These products include Ondo Finance’s USDY, BlackRock’s BUIDL, USTB, Mountain USDM, OpenEden’s TBILL, and Backed Finance’s bIB01.

Read more: How To Invest in Real-World Crypto Assets (RWA)?

These moves from MakerDAO and Arbitrum also align with the growth of the tokenized treasury segment. RWA.xyz data shows that tokenized treasury’s market capitalization has soared from $580.3 million to $1.85 billion on a year-on-year basis. This figure marks an approximately 218.8% increase.

Lynn Wang is a seasoned journalist at BeInCrypto, covering a wide range of topics, including tokenized real-world assets (RWA), tokenization, artificial intelligence (AI), regulatory enforcement, and investments in the crypto industry. Previously, she led a team of content creators and journalists for BeInCrypto Indonesia, focusing on the adoption of cryptocurrencies and blockchain technology in the region, as well as regulatory developments. Prior to that, at Value Magazine, she covered...