- 117,000 MKR tokens were used to support the plan, while just 4,200 were used to reject it.
- The U.S. bank will be able to get liquidity in the form of DAI, a stablecoin.
A U.S. bank, the Huntingdon Valley Bank (HVB), will be connected to MakerDAO’s decentralized financial system for the first time. The community has voted in favor of the plan, and the financial institution will be allowed to borrow up to $100 million at the start. New Vault Type with the financial institution was approved by 87% of the votes. Over 117,000 MKR tokens were used to support the plan, while just 4,200 were used to reject it.
The proponents explained:
“Huntingdon Valley Bank, a Pennsylvania-based community bank, is seeking a 100 million DAI debt ceiling participation facility to support the growth of existing businesses and to grow new businesses. HVB and RWA Master Participation Trust (established for the benefit of Maker) will not have a borrower-lender relationship.”
DeFi Protocol to Finance Loans
For “for the sale of participation interests in the underlying whole loans,” the U.S. bank will be able to get liquidity in the form of DAI, a stablecoin. A major emphasis of the financial organization is creating fixed and floating mortgages for residential and commercial property owners.
The RWA Master Participation Trust will let the bank present possible yearnings in which MakerDAO may engage. As a result, the DeFi protocol may play a role in this process. As a result of the vote and the relationship with the Huntingdon Valley Bank, this is the first time that a U.S.-based financial institution has used the DeFi protocol to finance loans.
Maker clarified this on its Twitter account:
“When HVB proposes loans for participation, Ankura Trust, the calculation agent, will ensure that proposed loan participations are eligible for funding. If participations conform, the Trust will acquire a (maximum) 50% interest in the underlying loan by executing a Certificate of Participation in exchange for cash (…).”
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