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Home»Defi»​​MakerDAO signs $100 million DAI loan with Huntingdon Valley Bank
Defi

​​MakerDAO signs $100 million DAI loan with Huntingdon Valley Bank

Donald MunnBy Donald MunnAugust 29, 2022Updated:September 29, 2022No Comments2 Mins Read
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MakerDAO has officially connected its native stablecoin, DAI, to mainstream finance through a partnership with Huntingdon Valley Bank (HVB), a community bank in Philadelphia.

The partnership between MakerDAO and HVB

Last March, Huntingdon Valley Bank in Philadelphia announced the creation of a collateral product with MakeDAO, one of the largest DeFi projects in the cryptocurrency world, founded in 2015 by Rune Christensen and controlled by the token holding company called Maker.

Huntingdon Valley Bank, a Pennsylvania Chartered Bank founded in 1871, has submitted a Collateral Onboarding Application to MakerDAO.

If approved by Governance, it will be the first collateral integration from a US-based bank into the DeFi ecosystem.https://t.co/w1UpzyoxOm

— Maker (@MakerDAO) March 25, 2022

The protocol’s goal is to enable the operation of a platform for generating and controlling a stablecoin, called DAI. It intends to facilitate access to decentralized finance.

This partnership, with a formal offer by MakerDAO to HVB for 100 million DAI, marks the first participation in a commercial loan between a regulated U.S. financial institution and a decentralized digital currency.

HVB, a Pennsylvania banking institution founded in 1871, has asked Maker to support the growth of business and investment in DeFi. In return, MakerDAO will be able to diversify counterparty risk and generate returns from its DAI holdings through HVB’s bond managers. This is the first partnership between a traditional financial institution and a decentralized finance institution.

The partnership received 87% approval, achieved through a governance vote carried out by the DeFi platform’s DAO.

The union between DeFi and traditional finance

TJ Ragsdale, who manages real-world resources at MakerDAO, said:

“As demand for crypto leverage is decreasing, rates in the real world are rising, so there’s an opportunity where Maker can mint DAI at a low cost of capital and lend it against really good, robust real-world assets at a higher rate.”

This new agreement comes after, not only the failure of the Terra ecosystem but also after the problems had by the cryptocurrency mixer Tornado cash, which led to the arrest in recent weeks of its developer, which created major protests throughout the crypto community.

This way, decentralized finance tries to find new outlets in the world of traditional finance, while giving up, however, in part, the concept of the decentralization of finance.

The post ​​MakerDAO signs $100 million DAI loan with Huntingdon Valley Bank appeared first on cryptodailynews24.com.

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