MakerDAO voting on $100M loan participation with Florida commercial bank

Crypto lending level MakerDAO is voting connected a caller connection to bring different commercialized slope into its ecosystem, strengthening the transportation between decentralized concern (DeFi) and accepted finance. 

As per MakerDAO's governance forum, Cogent Bank, a Florida commercialized bank, is proposing to enactment with $100 cardinal successful loans to MakerDAO's RWA Master Participation Trust.

The connection is portion of MakerDAO's monthly governance cycle, and seeks the aforesaid presumption and conditions applied to Pennsylvania-based slope Huntingdon Valley Bank (HVB). HVB entered into a collateral integration with the crypto firm successful July 2022, allowing the slope to get against its assets utilizing DeFi.

Under the aforesaid conditions, MakerDAO volition usage its spot limb to nexus the superior disposable astatine Cogent Bank with the Dai (DAI) stablecoin issued by MakerDAO. The spot entity volition beryllium liable for ensuring DAI minting and demolition from the vault, arsenic good arsenic managing the concern with the Bank.

Cash travel diagram - Maker Vault/Cogent Bank. Source: MakerDAO's forum

The DeFi protocol would summation vulnerability to the recognition marketplace successful astatine slightest 8 categories, including commercialized existent estate, industrial, beingness insurance, consumer, and nationalist finance, with loans issued mostly connected a fixed-rate basis.

Among the gross sources for MakerDAO are fees associated with maintaining the vault, minting DAI, and yields. The benchmark 30-day mean Secured Overnight Financing Rate (SOFR) stood astatine 4.15% arsenic of Jan. 5.

Before its acquisition successful 2018, Cogent Bank was known arsenic Pinnacle Bank. The Florida slope has $1.3 cardinal of assets nether management, and it is insured by the Federal Deposit Insurance Corporation (FDIC). According to the company, loans originated successful the archetypal 3 quarters of 2022 totaled $602 million, and summed to $873 cardinal successful 2021.

In a bid to endure the crypto wintertime past year, MakerDAO disclosed a governance process for its archetypal collaboration with a accepted slope - Huntingdon Valley Bank. At that time, the DeFi protocol announced plans to onboard different banks depending connected the results of its integration with HVB.