spark

Kicking off on August 12, the Spark Tokenization Grand Prix is a key part of MakerDAO’s Endgame strategy. This contest aims to onboard $1 billion worth of tokenized real-world assets, drawing attention from major financial players.

Attracting Financial Heavyweights

Last week, MakerDAO introduced the Spark Tokenization Grand Prix, a contest designed to bring $1 billion in tokenized real-world assets into its ecosystem. Major financial institutions, including BlackRock, Superstate, and Ondo Finance, have shown interest in participating.

Carlos Domingo, CEO of Securitize and BlackRock’s issuance partner, called it a “great strategy” by MakerDAO. “We will support this initiative with BlackRock’s BUIDL, the largest tokenized treasury fund,” he said on X, noting BUIDL’s role in a similar initiative by Arbitrum, the leading Ethereum Layer 2 network.

Great move by @makerdao. We will be there supporting this initiative with Blackrock's BUIDL, the largest tokenized treasury fund and the one that received the largest allocation from a recent similar move by @arbitrum
https://t.co/aIIgDwUJmZ via @coindesk

— Carlos Domingo (@carlosdomingo) July 12, 2024

Asset management firms Superstate and Ondo Finance, which manage $550 million in real-world assets (RWAs), are also eager to participate. “Superstate is excited for the opportunity to participate in MakerDAO’s tokenized treasury investment plan,” the firm tweeted.

MakerDAO’s Performance

MakerDAO’s MKR token has risen nearly 30% in the past week, becoming one of the top performers among the top 100 digital assets by market capitalization. The Spark Tokenization Grand Prix is a critical part of MakerDAO’s broader Endgame strategy.

The Endgame Plan aims to enhance governance and tokenomics within the Maker ecosystem to achieve a self-sustainable state called the Endgame State. In this state, the ecosystem becomes resilient, and Maker Core’s scope and complexity stabilize, according to MakerDAO’s documentation.

The Competition and Its Goals

The competition invites developers to tokenize traditional financial products like U.S. government bonds. MakerDAO plans to invest $1 billion in these products to integrate them into its ecosystem. Eligible products must have fair pricing, ample liquidity, and align with MakerDAO’s long-term goals. A committee led by Maker governance will evaluate and select the best products.

The Spark Tokenization Grand Prix has just been officially announced.

Take part in shaping the mission to onboard $1 billion in tokenized real-world assets to MakerDAO.

Follow @sparkdotfi and read the thread below for more information. https://t.co/w3O9y7OypR

— Maker (@MakerDAO) July 11, 2024

Increasing Engagement and Revenue

According to Token Terminal, MakerDAO’s weekly active users increased by 18% in July, rising to 726 from 614 in June. Revenue also grew, with July recording $14 million in the first 15 days, compared to $10 million in June.

BlackRock’s BUIDL Reaches Milestone

BlackRock’s USD Institutional Digital Liquidity Fund, known as BUIDL, recently reached a $500 million market cap, becoming the first product of its kind to hit this milestone. BUIDL holds $502.8 million worth of tokenized Treasuries, according to Etherscan.

The tokenized Treasury market has grown significantly, with firms like Ondo Finance buying more of BlackRock’s BUIDL to back its OUSG token. The market has expanded to nearly $1.56 billion from just $100 million in January 2023.

In December 2022, BlackRock CEO Larry Fink stated that blockchain tokenization will be “the next generation for markets, the next generation for securities.” The Boston Consulting Group projects the tokenization market to reach $16 trillion by 2030.

MakerDAO’s DeFi Leadership

In June 2023, nearly 80% of MakerDAO’s fee revenue came from RWAs, amounting to $13.5 million for the treasury. MakerDAO is the largest DeFi protocol in the Collateralized Debt Position (CDP) category, with nearly $5.7 billion in total value locked, according to DeFiLlama.

Users can mint DAI, a dollar-pegged stablecoin, against collateral assets deposited to the MakerDAO protocol. DAI is the third-largest stablecoin, with a market capitalization of $5.3 billion.