MakerDAO voting on $100M loan participation with Florida commercial bank
Crypto lending platform MakerDAO is voting on a new proposal to bring another commercial bank into its ecosystem, strengthening the connection between decentralized finance (DeFi) and traditional finance.
As per MakerDAO’s governance forum, Cogent Bank — a Florida-based commercial bank — is proposing to participate with $100 million in loans to MakerDAO’s RWA Master Participation Trust.
Maker Governance votes on 4 Governance Polls within the current monthly governance cycle.What's being voted on and what are the implications?Recap, here. ↓ pic.twitter.com/YivsBJHpHv
The proposal is part of MakerDAO’s monthly governance cycle and seeks the same terms and conditions applied to Pennsylvania-based bank Huntingdon Valley Bank (HVB), which entered into a collateral integration with the crypto firm in July 2022, allowing the bank to borrow against its assets using DeFi.
Under the same conditions, MakerDAO would use its trust arm to link the capital available at Cogent Bank with MakerDAO’s Dai (DAI) stablecoin. The trust entity would be responsible for ensuring DAI minting and destruction from the vault, as well as managing the partnership with the bank.
The DeFi protocol would gain exposure to the credit market in at least eight categories, including commercial real estate, industrial, life insurance, consumer and public finance, with loans issued mostly on a fixed-rate basis.
Among the revenue sources for MakerDAO are fees associated with maintaining the vault, minting DAI, and yields. The benchmark 30-day average secured overnight financing rate stood at 4.15% as of Jan. 5.
Before its acquisition in 2018, Cogent Bank was known as Pinnacle Bank. The Florida bank has $1.3 billion of assets under management and is insured by the
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