100-Year-Old Pennsylvania-Based Bank Approved to Leverage Makerdao’s Stablecoin Vault

Makerdao governance survey breakdown shows that the community approved a proposal for collateral integration with Pennsylvania-based financial institution Huntingdon Valley Bank. Makerdao reviewed the proposal July 4, 2022 and noted that RWA-009 would be the first such concept in decentralized finance (defi). Makerdao’s proposal uses the term “real-world assets” as its acronym.

stated that ‘The first collateral integration by a U.S. bank in the defi environment is getting closer’. The Maker Governance votes to include RWA-009 (a 100 million DAI debt limit participation facility) in the Maker Protocol’s new collateral type,’ the team explained.

Makerdao explained how the scheme would work in a twitter thread that was published at the end March 2022. It would allow Huntingdon Valley Bank to borrow DAI using HVB’s participating loans as collateral. Makerdao stated that the application requested a $100 million initial debt limit of Huntingdon Valley Bank Participated loans. These loans would be spread across all loan categories and will be used over a 12- to 24-month period.

Makerdao revealed that HVB would be first to enter the project’s ‘Master Purchase Agreement’, but the project has full ‘intentions to include more banks in future. With $6.48 billion in market value, the stablecoin of DAI is fourth.

Makerdao’s native cryptocurrency asset MKR increased 2.5% over the U.S. Dollar in the past seven days. However, MKR has fallen more than 65% year-to-date. The DAO’s native crypto remains at $921 per unit. This is 448% more than the record low of $168 per unt on March 16, 2020.

Makerdao holds a little more than 10% of the total $75.54 billion locked value of the defi ecosystem. Makerdao’s total locked value (TVL) is $7.56 Billion, a decrease of 4.38% in the last month.

Makerdao’s plans at the end April to add layer two (L2) scaling support by Starknet was recently passed. Makerdao’s team stated that DAI transfer costs could be lower than onchain fees by using the zero-knowledge rollup solution Starknet.

Since the beginning, Makerdao members have been keen to leverage real-world assets in the project. Hexonaut is a Makerdao protocol engineer. stated that the DAO must ‘take the next step’ and ‘integrate with the real world at large’ in mid-March 2022. Huntingdon Valley Bank used off-chain loans to pledge real-world assets (RWA), in the agreement.