Despite dropping off some this morning, MakerDAO’s native governance token has enjoyed hefty growth this week even amid the latest rate hikes from the Fed.

Maker enables the minting of U.S. dollar-pegged DAI against over-collateralized deposits of other cryptocurrencies, like Ethereum or Uniswap’s UNI token.

The U.S. Federal Reserve opted to lift rates again on Wednesday as part of its ongoing battle to quell inflation. The latest 25-basis-point hike now brings the federal funds rate to a range of 5.25% to 5.50%.

At roughly the same time, MKR jumped from $1,119 on Wednesday to $1,266 on Thursday, marking a hefty 13% rise. Today, it’s shed some of those gains and is now trading at $1,167, per CoinGecko.


The reasons behind the increase are manyfold, but users have been quick to point to the protocol’s recent onboarding of Treasury Bills. Daistats, a platform monitoring the types of assets in the protocol, indicates there are $1.732 billion in T-Bills on Maker.

Since last year, as part of its “Endgame Plan,” the protocol has been busy onboarding so-called real-world assets to diversify its treasury.

Now, with rates on the rise, that stash is generating some serious cash for Maker.


Alongside those T-Bills, the project has also moved to adjust its tokenomics.

Maker DAO’s buyback program and revenue uptick

Last year, MakerDAO embarked on a journey to convert its stablecoin deposits to yield-generating traditional financial assets, including U.S. Treasury bills and loans to institutions, adding to its portfolio of real-world assets (RWA).

The percentage of RWA assets—mainly comprising U.S. T-bills—for DAI collateralization has increased from 23.3% at the end of May to 35.1% by July 27, per Dai Stats data.

RWA assets are also the leading breadwinners for the protocol, accounting for 54% of its total revenue, per a Dune dashboard. The revenues come from the fees for minting DAI and yields on collateral such as U.S. T-bills.

The increase in Maker’s exposure to U.S. T-bills and Fed’s rate hike have together helped in increasing the yield on DAI, and subsequently the protocol’s revenue.

DeFiLlama data shows Maker’s revenue has increased tenfold since its started buying treasury bonds in October 2022, from $31,300 earned daily to over $320,000 in June.

Green chart on black background.
MakerDAO Revenue. Source: DefiLlama

The MakerDAO community has also recently implemented a Maker Burn Engine program on July 18 to buyback a portion of the MakerDAO’s surplus revenue to increase MKR’s liquidity across various decentralized exchanges and burn a portion of it.

Since the code’s execution, the projected amount of MKR buyback has increased by 1,622 MKR worth $2 million in less than ten days.


A higher degree of MKR burns after the tokenomics change are contributing significantly to MKR’s price surge.

a chart with a yellow line.
MKR buyback projections. Source: makerburn.

Nansen’s supply distribution data for MKR tokens reveals that “smart money” wallets have been aggressively accumulating MKR since the start of the year.

The crypto analytics firm tags wealthy and most profitable addresses as “smart money.”

a chart with green and blue lines.
Number of smart money wallets holding MKR and MKR balances in them. Source: Nansen.

While the total supply held by these wallets dropped slightly over the last few days, the number of smart money wallets holding MKR continues to rise.

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