MakerDAO (MKR-USD) is bridging with the world of traditional finance. The decentralized autonomous organization (DAO) is bringing a centralized bank into its ecosystem for the first time, pending a community vote. The news stands to be a major catalyst for growing the ecosystem and legitimizing the crypto industry further.
MakerDAO, or simply Maker, is one of the best-known examples of a DAO. DAOs allow users to control a project completely through direct democracy. Owning MKR tokens provides the voting power one needs to contribute to the network.
The Maker organization is built specifically to control the DAI (DAI-USD) stablecoin. Through the DAO, users can make decisions about how to reward DAI staking, setting fees or collateralizing the stablecoin with other assets. It’s worth mentioning DAI is the eleventh-largest cryptocurrency in the world and the fourth-largest stablecoin. It’s easily the largest stablecoin run entirely by a DAO rather than a centralized team of developers. As such, the Maker ecosystem is incredibly important.
Being so egalitarian, Maker users are loathe to let a centralized entity infringe on their activities. This sparked controversy on the network when developers behind the protocol startled governance users by suggesting a “Growth Task Force.” This task force would essentially become a board of directors overseeing the network. Of course, all of the proposals related to this task force failed when brought to vote.
But there’s some news today that shows users can see the benefit in joining up with centralized entities. From the looks of it, the network could have a bank among its ranks soon, helping Maker to leverage its power in the world of traditional finance.
MKR Crypto Gets Boost Ahead of Bank Partnership Approval
MKR crypto holders are having a good morning. The token is seeing a boost of about 8%, helping to uplift portfolios surely battered by the bear market. But more importantly than a single day of gains is the good news that Maker could be expanding its influence outside the world of crypto — a move with positive long-term implications.
Yesterday, a proposal launched on the network to collaborate with a traditional bank for the first time. Specifically, the proposal seeks to create a vault of 100 million DAI tokens for Huntingdon Valley Bank in Pennsylvania. If it passes, the collaboration will present Maker with an opportunity to issue loans in the real world for borrowers through a brick-and-mortar institution. So far, more than 50,000 votes in favor of the partnership have been cast. Voting remains open until tomorrow.
This news comes only a week after Maker’s last blockbuster proposal. Previously, members voted to approve a $500 million DAI investment into U.S. treasuries and bonds. The two moves into the traditional finance world are sure to help the network shrug off future crypto market volatility.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.