But thatâs not all.
Say what?đ€Â
Simply put, SocGen is using an Ethereum smart contract as a bank.
Assets go in (in this case, AAA-rated loans backed by real estate) and US dollars come out.
The difference is that Maker is a decentralized smart contract, not an actual bank. And SocGen isnât getting actual US dollars - itâs getting DAI stablecoins, which are tokens on Ethereum that are pegged to the US dollar.
Are you still with us?đ€
The transaction and structure itself isÂ
quite complex, but letâs not get caught in the weeds⊠the key takeaway in our view is that weâre witnessing two major trends that will reshape finance:
- Bringing real world assets into a blockchain framework, and
- Building bridges between the crypto economy and traditional finance
SocGen and Maker tick both boxes. Itâs just another reason we are excited to be investors in Maker (see here forÂ
our MKR thesis).