The price of MKR, the governance token of the MakerDAO lending and borrowing protocol, rose in the market today after a proposal was published by French investment banking giant Societe Generale, asking to borrow stablecoins using a tokenized bond as collateral.
As of 13:40 UTC, MKR was up by 7.5% over the past 24 hours to trade at USD 2,443.
The price was rallying even before almost the whole market moved higher sharply, with bitcoin (BTC) and ethereum (ETH) trading up by 8.7% and 7.2%, respectively, over the same time period.
In the proposal, which was submitted on MakerDAO’s governance forum by the bank’s blockchain-focused subsidiary Societe Generale – Forge (SG-Forge), details of the bond tokens were laid out – with the bank saying that they were issued on the Ethereum blockchain in May of 2020, and that they can only be traded over-the-counter (OTC).
The bank, often nicknamed ‘SocGen,’ further wrote in its proposal that the bond, backed by home loans, has a fixed rate of 0% and that it matures in 2025. It also has a top AAA rating from major financial ratings agencies Fitch and Moody’s, the bank wrote.
The proposal went into great detail on how the loan could be issued, complete with an illustration showing the proposed relationship between Maker, SocGen, SG-Forge, and a proposed exchange agent.
Sharing the news on Twitter, MakerDAO founder Rune Christensen wrote that he is “amazed that he had no clue” such a request would come, and that it shows the power of the “post-foundation” governance model for organizations.
In the comments section under the proposal, several members of the MakerDAO community expressed enthusiasm for the idea.
“Huge thanks to those who had a hand in getting it this far. They all know who they are, so I won’t doxx them unless they want the public accolades,” wrote PaperImperium, the DAO’s most powerful delegate with about 3% of all votes on the protocol, adding:
“Maker and SocGen-Forge are standing at the precipice of financial history. What a time to be alive.”
“A landmark day, even more for traditional credit institutions than MakerDAO,” user luca_pro said, opining that the proposal puts back into focus how responsibilities can be shared and decentralized across an ecosystem consisting of borrowers, structurers, intermediaries, and financiers. “Immense kudos to those who contributed,” said luca_pro.
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