MakerDAO is voting on a partnership with a conventional bank

Depricated as of Oct 2022

Some CRYPKYP functionalities are depricated as of October 2022 and will no longer be populated until further development and future version.
Although all here is visible and interactable you can not Contribute to those articles.
Try looking at other information on the Platform and Contributing there!

Have a great day,

MakerDAO is voting on a partnership with a conventional bank

MakerDAO is voting on a partnership with a conventional bank
Source: CoinTelegraph
1657104024 06 Jul / 10:40

MakerDAO is voting on a proposal that will, for the first time, integrate a traditional bank into its ecosystem, enabling the bank to borrow against its assets via decentralized financing (DeFi).

Currently, 83 percent of voters support the proposition. Voting finishes on July 7 at noon EDT.

As part of the Maker Protocol's new collateral type, the plan calls for creating a vault holding 100 million Dai (DAI) for Huntingdon Valley Bank (HVB).

By completing the bank’s requirements, the Maker Protocol will be able to provide real-world loans to borrowers through a fully-backed conventional institution.

After MakerDAO members voted last week to invest $500 million DAI in treasuries and corporate bonds, the decision to merge the bank comes on the heels of another choice to become more intimately intertwined with traditional banking.

MakerDAO manages the Maker Protocol, which releases DAI stablecoins tied to the United States dollar in exchange for Ether (ETH) and roughly 30 other cryptocurrencies. The Huntingdon Valley Bank is a Pennsylvania-based, conventional bank founded in 1871.

The agreement with HVB is significant for the Maker Protocol because it is not permitted to issue direct U.S. dollar loans to borrowers. Nonetheless, MakerDAO will form a unique organization to enable interaction with regular banks.

First, MakerDAO will form a Multi-Bank Participation Trust (MBPTrust) in Delaware to link the money available at HVB with Maker’s Dai stablecoin.

The trust would oversee the minting and destruction of DAI from the vault and manage business matters with HVB.

HVB would initially control 50 percent of the loans given under this plan but would persuade MakerDAO to lower its stake to a minimum of 5 percent over time. The remaining assets would belong to MBPTrust. This step would reduce the bank’s risk, as it would make loans through the Maker Protocol per Pennsylvania law.

Maker Protocol, which has been searching for solutions to withstand the downturn market, might generate money through vault stability fees linked with managing the vault and minting DAI.

The return, anticipated to be as high as 75 basis points above the 30-day average Secured Overnight Financing Rate (SOFR) of 0.083 percent, would also generate revenue.

HVB gains by expanding its legal loan limit to over $7 million per borrower.

MakerDAO thinks that assuming the HVB integration is successful over some time. The same MBPTrust might be used for other onboard banks.

Last News and Media
CRYPKYP contain links to third-party websites, resources, and advertisers. CRYPKYP does not control, sponsor, recommend or otherwise accept responsibility for any third-party content because we are not responsible for the availability of these outside resources or their contents or privacy practices. It will help if you direct any concerns regarding any third-party content to such a third party. We don't accept responsibility for the content of external websites linked to through the Site or the Services. Third-party content is accessed at the user's own risk. CRYPKYP distributes content from third-party publishers as indicated on the site from time to time mainly in Airdrops, News / Media, Whale Alerts, and Rumors. In these circumstances, CRYPKYP only provides limited stylistic input to the content. CRYPKYP does not verify and takes no responsibility for the accuracy of the content provided by any such third-party publishers.