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MakerDAO Votes to Allow $100M DAI Loans to U.S. Bank

MakerDAO Votes to Allow $100M DAI Loans to U.S. Bank

The Huntingdon Valley Bank will now have the choice to borrow as much as $100 million in DAI from MakerDAO.

Key Takeaways

  • The MakerDAO community has handed a proposal to integrate a U.S. bank into its collateral system.
  • The Huntingdon Valley Bank has a debt ceiling of $100 million. It can per chance have the choice to borrow the sum in DAI by depositing collateral into an off-chain chronicle.
  • 5 other right-world resources gain been integrated to MakerDAO, with more recommendations in discussion on the governance board. The protocol recently voted to allocate $500 million in DAI into bonds.

MakerDAO will now have the choice to loan as much as $100 million price of DAI to Huntingdon Valley Bank when it posts collateral to an off-chain chronicle. It’s the first time a U.S. bank has linked to the DeFi ecosystem.

Integrating TradFi into DeFi

MakerDAO is taking steps to take over the venerable finance world.

The leading DeFi protocol’s DAO handed a vote at the present time to add the Huntingdon Valley Bank to its Right-World Asset Maker Vaults, meaning that MakerDAO will have the choice to lend as much as $100 million in DAI to the Pennsylvania-essentially based bank every time it deposits collateral staunch into a explicit off-chain chronicle. An 87.27% majority voted in prefer of the proposal. 

MakerDAO is an Ethereum-essentially based DeFi protocol that allows users to mint the DAI stablecoin when they deposit collateral. To this level, the collateral users can deposit has largely approach within the originate of most major digital currencies like Bitcoin and Ethereum. The permitted proposal brings a regulated U.S. bank into the DeFi ecosystem for the first time.

Other right-world resources gain already been added to MakerDAO’s vaults with assorted debt ceilings. The protocol can loan as much as $18 million in DAI for tokenized right estate posted as collateral, $14 million to industrial right estate builders, $5 million to gain U.S. Earnings Primarily based Financing resources, nearly $2 million to tokenized freight invoices, and $1.8 million to Rapid Term Substitute Receivables. In complete, with the novel proposal now handed, MakerDAO can loan $141 million in DAI for collateralized right-world resources. 

The Huntingdon Valley Bank integration might per chance be the protocol’s most bright so a long way. The DAO is furthermore taking a think into doubtlessly letting the French multinational funding bank Société Générale borrow $30 million in DAI. Additionally, it plans to make investments $500 million in DAI in U.S. Treasury bills and corporate bonds.

While the MakerDAO algorithm liquidates users mechanically if their collateral falls under a favorable threshold, the Huntingdon Valley Bank Vault can perfect be terminated by a governance vote as its resources are collateralized off-chain in preference to on Ethereum. 

The rising complexity of MakerDAO’s collateral system recently triggered a hotly contested proposal for the DAO to nominate an advisory committee that would show MKR holders on future proposals. The view used to be rejected on Jun. 27, with 60.17% of votes going against the proposal and perfect 38.28% vote casting in prefer. 

Disclosure: At the time of writing, the author of this fragment owned ETH and several other cryptocurrencies.

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