​​MakerDAO signs $100 million DAI loan with Huntingdon Valley Bank
​​MakerDAO signs $100 million DAI loan with Huntingdon Valley Bank

​​MakerDAO signs $100 million DAI loan with Huntingdon Valley Bank

By Vincenzo Cacioppoli - 25 Aug 2022

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MakerDAO has officially connected its native stablecoin, DAI, to mainstream finance through a partnership with Huntingdon Valley Bank (HVB), a community bank in Philadelphia.

The partnership between MakerDAO and HVB

Last March, Huntingdon Valley Bank in Philadelphia announced the creation of a collateral product with MakeDAO, one of the largest DeFi projects in the cryptocurrency world, founded in 2015 by Rune Christensen and controlled by the token holding company called Maker.

The protocol’s goal is to enable the operation of a platform for generating and controlling a stablecoin, called DAI. It intends to facilitate access to decentralized finance.

This partnership, with a formal offer by MakerDAO to HVB for 100 million DAI, marks the first participation in a commercial loan between a regulated U.S. financial institution and a decentralized digital currency.

HVB, a Pennsylvania banking institution founded in 1871, has asked Maker to support the growth of business and investment in DeFi. In return, MakerDAO will be able to diversify counterparty risk and generate returns from its DAI holdings through HVB’s bond managers. This is the first partnership between a traditional financial institution and a decentralized finance institution.

The partnership received 87% approval, achieved through a governance vote carried out by the DeFi platform’s DAO.

The union between DeFi and traditional finance

TJ Ragsdale, who manages real-world resources at MakerDAO, said:

“As demand for crypto leverage is decreasing, rates in the real world are rising, so there’s an opportunity where Maker can mint DAI at a low cost of capital and lend it against really good, robust real-world assets at a higher rate.”

This new agreement comes after, not only the failure of the Terra ecosystem but also after the problems had by the cryptocurrency mixer Tornado cash, which led to the arrest in recent weeks of its developer, which created major protests throughout the crypto community.

This way, decentralized finance tries to find new outlets in the world of traditional finance, while giving up, however, in part, the concept of the decentralization of finance.

Vincenzo Cacioppoli

Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog. mediateccando.blogspot.com, he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.

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