It looks like MakerDAO’s Dai Stablecoin is built on the idea that securing a cryptocurrency through collateral and lock-up periods reduces the frequency of price volatility. A $100 million DAI loan is now available to Huntingdon Valley Bank. MakerDAO is using its native stablecoin, the Dai, to test this thesis by depositing $100M in an off-chain bank account in order to reduce counterparty risk. If successful, this could become a standard practice for decentralized autonomous organizations.
- As part of MakerDAO’s collateral system, a U.S. bank has been integrated. There is a $100 million debt ceiling for Huntingdon Valley Bank. By depositing collateral into an off-chain account, it will be able to borrow the DAI sum.
- MakerDAO has already integrated five real-world assets, with more suggestions being discussed on the governance board. DAI was recently allocated to bonds for $500 million.
When MakerDAO posts collateral to an off-chain account, it can lend Huntingdon Valley Bank up to $100 million worth of DAI. A U.S. bank is the first to join the DeFi ecosystem.
MakerDao Voters Accept Proposal to Lend $100M To A Pennsylvania-based Bank
Today, MakerDAO’s DAO passed a vote adding Huntingdon Valley Bank to its Real-World Asset Maker Vaults, allowing MakerDAO to lend up to $100 million in DAI to the Pennsylvania-based bank whenever it deposits collateral into an off-chain account. The proposal was approved by a majority of 87.27%.
When users deposit collateral, MakerDAO mints the DAI stablecoin based on Ethereum. Bitcoin and Ethereum are two major digital currencies that users can deposit as collateral. As a result of the accepted proposal, the DeFi ecosystem will be able to include the first regulated U.S. bank.
A variety of debt ceilings have already been added to MakerDAO’s vaults with other real-world assets.
For tokenized real estate posted as collateral, the protocol can lend up to $18 million in DAI, $14 million to commercial real estate developers, $5 million to acquire RBF assets, nearly $2 million to tokenized freight invoices, and $1.8 million to short-term trade receivables. MakerDAO can now lend $141 million in DAI for collateralized real-world assets with the new proposal now passed.
It will be the largest integration the protocol has ever done. A $30 million DAI loan to Société Générale is also being explored by the DAO. Furthermore, it plans to invest $500 million in U.S. Treasury bills and corporate bonds.
The MakerDAO algorithm automatically liquidates users whose collateral falls below a certain threshold, whereas the Huntingdon Valley Bank Vault can only be terminated through a governance vote because its assets are collateralized off-chain.
As MakerDAO’s collateral system continues to grow in complexity, a proposal was recently put forward for the DAO to set up an advisory committee to provide advice on future proposals. 600.17% of votes were against the proposition and 38.28% were in favor on Jun. 27.
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