(Bloomberg) -- One of crypto’s biggest decentralized lenders has doubled down on its decision to invest billions of dollars in US governments bonds, propelling its token to a 18-month high, trouncing all other major cryptocurrencies like Bitcoin.

MKR, the governance coin of the MakerDAO protocol, has soared 77% this quarter to reach its highest level since April 2022. The coin gave up some gains on Friday, slipping 3.9% to $1,453 as of 12:22 p.m. in London. It’s the best performer this year among the largest cryptocurrencies tracked by Bloomberg, almost tripling in value. 

MakerDAO oversees $4.6 billion in assets, according to data from DefiLlama.  

MKR’s rally this year stems from a 2022 decision by MakerDAO to convert the funds backing its stablecoin DAI into assets like short-term US Treasuries and corporate bonds, searching for more stable yields as crypto markets tumbled. Earlier this week, the organization passed a proposal that will allow it to invest up to $6 billion in short-term Treasuries, double the current limit. 

The gains “can be attributed to rising treasury yields, which have ticked up significantly since the last Fed meeting as they hinted at keeping rates higher for longer,” said Simon Peters, an analyst at investment platform eToro. 

There are signs the frenzied advance in MKR is nearing exhaustion. The amount of the token held on centralized exchanges has been ticking higher, according to data from CryptoQuant. That suggests some traders have been preparing to sell to lock in profits from the recent gains. Friday’s drop was the biggest since mid-September.

Trader enthusiasm for MKR has spilled over to DAI, the project’s stablecoin. Its circulation has increased to $5.5 billion from an Aug. 20 low of $3.9 billion after MakerDAO introduced a limited time-offer of 8% annual yield to holders of DAI. That, combined with the passing of the investment proposal, could in turn trigger a fresh buying spree of short-term Treasuries. 

“Should DAI supply continue to increase, one could easily imagine this resulting in doubling the amount of T-bill investments by Maker over a very short time horizon,” Allan Pedersen, the chief executive of Monetalis, which helps MakerDAO invest in such instruments, said in an interview.

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