By Alicia Maher
In association with the Iron Bank, CREAM finance is launching the first decentralized autonomous organization (DAO)-to-DAO loan. It’s similar to a business-to-business loan. The PleasrDAO foundation will provide the collateral for the loan. PleasrDAO is an investment group and has been purchasing several high-end non-fungible tokens (NFTs) in recent months.
The Iron Bank is owned by Yearn finance and CREAM Finance to enhance protocol-to-protocol loans. However, the Iron Bank’s use case will now be expanded once the DAO-to-DAO loan collaboration with PleasrDAO is successfully launched.
PleasrDAO is backed by leading firms and investors in the decentralized finance (DeFi) industry like Mechanism Capital, Compound, and Aave.
The Present DeFi Situation
As of today, there is less focus on the hidden benefits in the protocol-to-protocol/DAO space. Much emphasis remains on the peer-to-peer loan model. But it seemed that CREAM finance has realized this massive golden opportunity and is now willing to explore that option.
There is a massive difference in their market sizes. There are $11 trillion outstanding loans in the business-to-business market, which is far greater than the $70 billion in the peer-to-peer market.
Iron Bank Expands To DAO-To-DAO Lending
With the inclusion of DAO-to-DAO lending in its services, PleasrDAO can leverage the Iron Bank’s assets and enhance its growth. PleasrDAO showed its willingness to facilitate the loan by putting its top four NFTs in a 2 of 3 multisig wallet.
Apart from PleasrDAO multisig, yearn deployer, and CREAM Finance multisig are the signatories to this wallet. High-end NFTs can serve as collateral as DAOs continue to grow as a means of managing governance and tokenized assets in a decentralized form. The entire NFT space is currently valued at more than $9 million, and the top two high-end NFTs remain Snowden and dreaming at dusk, which was bought for $5.46 million and $4.5 million, respectively.
A Novel Launch
Now, creators in the NFT space can access loan terms similar to what’s available to top art collectors from traditional firms. Leo Cheng (CREAM finance’s project lead and co-founder) remarked that “with this collaboration and the ensuring services that will be on offer, the Iron Bank is treading a new path. We believe we are just getting started as we plan to develop more innovations in this space.”
PleasrDAO’s Chief Pleasing Officer Jamis Johnson also remarked that “almost nobody is exploring this rapidly developing aspect of DeFi. There will soon be an integrated ledger that contains a person’s identity, credibility, on-chain history, records of shortfalls, behavior, and achievement. While the Iron Bank will continue to offer its current services, our collaboration means they can extend such services to DAOs.”
“Then, over time, we will develop a framework to extend such services to persons with the right social status. As the first NFT-backed, DAO-to-DAO loan on the Iron Bank, we are excited with this partnership, and we are even more excited with what’s to come,” he concluded. Despite the massive potential benefits, under-collateralized loans still portend great risk in a nascent DeFi space.