MakerDAO May Expand Non-cryptoasset Portfolio With BlockTower, Centrifuge

A $220 million “real-world asset” vault may soon be available to DeFi investors

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Blockworks exclusive art by Axel Rangel

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Cryptocurrency investment firm BlockTower Credit and DeFi lending protocol MakerDAO will vote on whether to fund $220 million in so-called real-world assets through Centrifuge.

If the vote passes, BlockTower will provide $70 million in junior capital —  that is, funds allocated to speculative activity and used for high-risk, high-reward investments — and Maker will approve $150 million in senior capital to create a $220 million pool on Centrifuge, a Berlin-based protocol that is bridging real-world assets to DeFi through tokenization. 

A community greenlight poll was passed on Aug. 15, with over 75% of MKR token holders voting in favor of including BlockTower Credit in the Maker Protocol via the Core Units. But further voting is required to complete the onboarding of real-world asset collateral in the Maker protocol.

“We believe Maker’s long term interests are best served through a diversified set of high-quality arrangers, credit exposures, and other partners — we look forward to helping Maker raise the bar,” Kevin Miao, head of credit at BlockTower, wrote in a governance forum post. 

Funding of real-world credit assets will be powered through Tinlake — a Centrifuge smart contract on the Ethereum network.

RWA owners are able to create a pool of their assets and offer it to DeFi investors on Tinlake. These assets will create a stable yield for investors and provide liquidity to issuers who set up and operate the pools. In the case of BlockTower and Maker, the proposed stable yield will sit at 4%.

According to Centrifuge, Tinlake’s smart contract eliminates a third party “trust layer” by embedding the process into the code. 

“We think it’s a prime example of how institutional investors are moving to safer crypto investments, ones that provide true utility and tangible ROI,” a Centrifuge spokesperson told Blockworks.

Centrifuge Tinlake has already brought over $25 million in assets to Maker through existing real-world asset vaults. 

Voting will go on chain on Friday Dec. 9 and a decision is expected to be made by early next week.


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