Societe Generale Withdraws $7M DAI from MakerDAO Vault

Societe Generale Accesses MakerDAO Vault

French banking giant Societe Generale has withdrawn $7 million worth of DAI from its MakerDAO vault. This marks the first usage of the vault since August 2022. The bank is a major player with over 138,000 employees across 62 countries.

Background of MakerDAO Vault

The partnership between Societe Generale and MakerDAO began in August 2022, when the bank was added to MakerDAO's digital asset subsidiary. At that time, the credit limit was established at $30 million DAI through a unanimous vote supported by 96,551 MKR tokens. The vault is backed by 40 million euros in OFH tokens, tokenized securities issued on Ethereum.

Collateral and Security

The MakerDAO vault is secured by overcollateralized loans that boast Moody’s AAA ratings. This ensures a robust framework for financial transactions. The collaboration initiated in October 2021 involved converting borrowed DAI into USD to offer Societe Generale a loan in exchange for OFH tokens.

Challenges with OFH Tokens

One challenge is that OFH tokens do not have a liquid market. If loans become undercollateralized, the liquidation of OFH tokens would need a manual approach, contrasting with the automated processes typical for other digital assets.

This withdrawal signifies a strategic financial maneuver by Societe Generale, leveraging digital asset innovation in collaboration with MakerDAO.