But that’s not all.
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 isn’t getting actual US dollars - it’s getting DAI stablecoins, which are tokens on Ethereum that are pegged to the US dollar.
Are you still with us?🤓
The transaction and structure itself is quite complex
, but let’s not get caught in the weeds… the key takeaway in our view is that we’re 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. It’s just another reason we are excited to be investors in Maker (see here for our MKR thesis