Stablecoin protocol leverages Centrifuge Prime, a service that gives the infrastructure for DAOs to spend money on real-world belongings.
Whereas Bitcoin Ordinals and memecoins on Solana have been dominating headlines, the development of tokenizing non-crypto belongings exhibits no signal of slowing down.
The neighborhood behind Frax Finance, the multifaceted stablecoin protocol, has voted to deploy $20M of its collateral into U.S. Treasuries.
Frax is leveraging an providing from Centrifuge, an organization which has emerged as a chief in the true world asset (RWA) area this yr. The collateral backs Frax’s stablecoins, probably the most distinguished of which is FRAX, a U.S. dollar-pegged asset with a $648M market capitalization.
“They’re successfully taking a few of their stablecoin collateral and changing it with T-bills,” Lucas Vogelsang, the founding father of Centrifuge, instructed The Defiant.
Frax will likely be deploying the belongings by way of Centrifuge Prime, a product which presents off-the-shelf options for DAOs trying to diversify their warfare chests. Prime supplies the technical, authorized, and monetary infrastructure for DAOs to spend money on RWAs.
Vogelsang sees Prime as filling a key want for DAOs past simply publicity to U.S. treasuries. “[DAOs] want assist in their governance processes,” he mentioned. “They want clear reporting that the entire DAO can see, they want the authorized construction.”
With benchmark rates of interest within the U.S. at their highest degree since 2001, Treasuries have attracted vital curiosity in crypto. The most recent vote by Frax’s DAO exhibits the continued demand from crypto tasks to diversify their holdings past crypto belongings.
Present DeFi yields are usually decrease than these supplied by conventional monetary merchandise, pushing DAOs to discover RWA options. “As a result of Treasury invoice rates of interest shot up a lot, probably the most enticing factor to do is take your stablecoins and switch them into tokenized T-bills,” Vogelsang mentioned.
MakerDAO, the collateralized lending platform, made a serious transfer final yr when it deployed $500M into Treasuries and company bonds. Different tasks like Ondo Finance shook up the area additional by providing tokenized Treasuries earlier this yr.
The whole worth of tokenized Treasuries is $775.4M as of Dec. 19.
This isn’t Centrifuge’s first time serving to a distinguished DAO allocate its assets — the mission offered the same framework to allow MakerDAO to deploy over $1B in capital, famous the Frax proposal.
Wanting ahead, Vogelsang mentioned that Centrifuge not too long ago launched on Arbitrum, the main Layer 2 scaling resolution for Ethereum, and that the mission’s DAO is trying to diversify its treasury into RWAs. “That’s undoubtedly an fascinating mission that we’re , together with many different DAOs, in fact,” he mentioned.
