MakerDAO Votes to Halt Lending to Tokenized Credit Pool After $2M Loan Default

DAI stablecoin issuer MakerDAO’s assemblage has decided to halt lending to a tokenized recognition excavation connected the Centrifuge protocol aft accruing $2.1 cardinal of indebtedness defaults.

In a governance vote that concluded Thursday astatine 12 p.m. (ET), voters unanimously favored stopping further lending to the embattled recognition pool, managed by fintech steadfast Harbor Trade. Maker is led by a decentralized autonomous enactment (DAO), wherever those who clasp MKR tokens tin enactment successful governance decisions.

“While Harbor Trade has verbally committed to cease further draws and voluntarily upwind down the vault, assemblage members person expressed interest astir the existing 7 cardinal Debt Ceiling and the hazard of perchance expanding vulnerability to this vault,” a MakerDAO governance post said.

Maker’s $4.5 cardinal stablecoin DAI is backed by indebtedness positions overcollateralized by cryptocurrencies, and increasingly, tokenized versions of loans and bonds, to gain a yield.

The Harbor Trade recognition excavation minted immoderate $1.5 cardinal of DAI stablecoins from MakerDAO and secured them with loans made to a user electronics firm. The borrower steadfast failed to wage down $2.1 cardinal of indebtedness matured successful April.

Harbor Trade is “actively engaged successful the workout process” and forecasts “a meaningful oregon afloat recovery,” according to MakerDAO, but the procedure could instrumentality six months oregon more.