C.R.E.A.M. Finance has announced the first DAO-to-DAO loan through the Iron Bank. A loan of $3.5 Million has been sanctioned, collateralized by PleasrDAO’s Foundation NFTs, having a combined valuation of $10.1 Million.
Both Yearn Finance and C.R.E.A.M. Finance have jointly developed the Iron Bank to facilitate protocol-to-protocol loans. With the successful DAO-to-DAO loan with PleasrDAO, they have successfully expanded the use case of the Iron Bank. PleasrDAO’s backers include prominent names from the Decentralized Finance space, such as Andrew Kang from Mechanism Capital, Robert Leshner from Compound, and Stani Kulechov from Aave.
The Current State Of DeFi
DeFi today is primarily based on a peer-to-peer lending model, with the growth potential in protocol-to-protocol/D.A.O.s largely unaddressed. According to C.R.E.A.M. Finance, DeFi’s real potential lies in the business-to-business market, which it plans to expand into.
The difference in market size was quite glaring, with $70 billion in outstanding loans in the peer-to-peer market, compared to $10 trillion in the corporate debt market.
The Iron Bank is now expanding from protocol-to-protocol lending to DAO-to-DAO lending. This allows PleasrDAO to leverage its assets and drive its growth. The loan will be facilitated by PleasrDAO, which has transferred four of its historical Foundation NFTs to a 2 of 3 multisig wallet. Signers of the wallet are PleasrDAO multisig, C.R.E.A.M. Finance multisig, and Yearn Deployer.
The NFTs Backing The Loan
With the emergence of DAOs as a popular mode of managing tokenized assets and governance in decentralized entities. As we already know, DeFi lending protocols utilize cryptocurrencies. However, this loan sees the use of high-end NFTs as collateral. The NFTs are collectively valued at over $8 Million.
The NFTs are highly valuable, and their value at the time of purchase is as follows
- Snowden - The NFT is valued at $5.44 Million
- Dreaming at Dusk - Valued at $4 Million
- x*y=k - Valued at $545,000
- Apes Together Strong - The NFT is valued at $127,000
Breaking New Ground
The developments allow the NFT market to access lending conditions that are comparable to those offered to high-end art collectors by traditional institutions. Co-Founder and Project Lead at C.R.E.A.M. Finance, Leo Cheng, stated,
“The Iron Bank is breaking new ground in DeFi, N.F.T., and DAOs by welcoming the first-ever DAO-to-DAO loan as well as the first high-end NFT-collateralized lending transaction. This is just the beginning as we continue to drive innovation in DeFi credit services.”
Jamis Johnson, Chief Pleasing Officer at PleasrDAO also commented on the developments,
“There is currently an underexplored human-to-human element of DeFi that is beginning to develop rapidly. Human identity and credibility will soon be a multifaceted concept tightly coupled with on-chain history, your record of achievement, behavior, and shortfalls — all engraved in the ledger..The Iron Bank may have its roots in granting credit to trusted, highly capitalized protocols, but this landscape is now extending to include DAOs and potentially individuals, all collateralized by liquid assets, illiquid NFTs, and even social standing. PleasrDAO could not be more pleased to be the first DAO-to-DAO, NFT-backed line of credit from the Iron Bank, and we feel this is only the beginning of what’s possible.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.