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100-Year-Old Pennsylvania-Based Bank Approved to Leverage Makerdao’s Stablecoin Vault – Defi Bitcoin News

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

Makerdao, the decentralized autonomous organization (DAO) that issues the stablecoin DAI, approved a governance vote that provides “collateral integration from a U.S.-based bank.” The Makerdao governance vote passed by a majority vote of more than 87%, and it allows the U.S. financial institution Huntingdon Valley Bank the means to leverage a stablecoin vault.

Huntingdon Valley Bank to Use Makerdao’s Stablecoin Vault System With Off-Chain Loans — RWA-009’s Initial Debt Ceiling Is $100 Million

According to a Makerdao governance poll breakdown, the community has approved a collateral integration proposal with the Pennsylvania-based financial institution Huntingdon Valley Bank. Makerdao discussed the proposal on July 4, 2022, and noted that the RWA-009 concept would be the first of its kind in the world of decentralized finance (defi). The term “RWA” used in the Makerdao proposal stands for “real-world assets.”

100-Year-Old Pennsylvania-Based Bank Approved to Leverage Makerdao's Stablecoin Vault
Huntingdon Valley Bank (HVB) is a Pennsylvania chartered financial institution that was founded in 1871. HVB is a subsidiary of the bank’s parent firm HV Bancorp, Inc. (Nasdaq Capital Market: HVBC).

“The first collateral integration from a U.S.-based bank in the defi ecosystem is getting closer,” the project’s official Twitter account explained. “The Maker Governance votes to add RWA-009, a 100 million DAI debt ceiling participation facility proposed by the Huntingdon Valley Bank, as a new collateral type in the Maker Protocol,” the team added.

In a Twitter thread published at the end of March 2022, Makerdao detailed how the scheme would work as it would allow Huntingdon Valley Bank (HVB) to borrow DAI by using HVB’s participated loans as collateral. “The application also requested an initial debt ceiling of $100 million dollars of Huntingdon Valley Bank Participated Loans diversified across all proposed loan categories, to be deployed over a period of 12 to 24 months from inception,” Makerdao said at the time.

100-Year-Old Pennsylvania-Based Bank Approved to Leverage Makerdao's Stablecoin Vault
Two charts shared by the Makerdao team on March 25, 2022, which explain how the partnership with Huntingdon Valley Bank works.

Makerdao also disclosed that while HVB would be the first to enter the project’s “Master Purchase Agreement,” the project has the full “intention to incorporate more banks in the future.” The project’s stablecoin DAI is the fourth-largest stablecoin project in terms of market valuation with $6.48 billion.

During the last seven days, Makerdao’s native crypto…

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