As per MakerDAO’s overcollateralization model, SG-FORGE’s DAI loan is secured with an excess of collateral in the form of OFH Tokens issued by SocIete Generale SFH as a security token registered on the Ethereum public blockchain. The OFH Tokens are covered bonds (rated aaa by Moody’s and AAA by Fitch) issued by Societe Generale SFH, backed by a pool of French home loans and guaranteed by Societe Generale (which is currently rated A by Fitch, A1 by Moody’s, and A by Standard & Poor’s).

Sylvain Prigent, Chief Product Officer at SG-FORGE, said: “This refinancing transaction is a prime example of SG-FORGE’s innovative approach to combining traditional capital market activities with the emerging and fast-growing DeFi ecosystem. It demonstrates the possibilities that lie at the crossroads between regulated and open-source initiatives. In addition to refinancing digital bonds held by Societe Generale and successfully integrating with one of the leading DeFi protocols, we are helping to shape and define the necessary legal, technical and operational frameworks to complete future DeFi to TradFi transactions.”

Initially proposed in 2021, this first DAI drawdown by SG-FORGE is the result of multiple proposals and governance votes which were passed by MakerDAO governance. Maker becomes the first DeFi protocol to refinance security tokens issued by a traditional, major, regulated bank. Societe Generale will use the fiat currency secured through this DAI loan to refinance the OFH Tokens that it issued in May 2020, with the aim of fostering liquidity for these digital bonds and establishing a legal framework for deals of a similar nature.

Annabelle Bernal, General Counsel at SG-FORGE said: “The most innovative and challenging part for this refinancing structure, from a legal standpoint, was to apprehend the economic reality of a decentralized autonomous organization (DAO). The challenge was to define how to enter into a loan agreement, with a full legal and regulatory security. The success of this transaction is the first step that demonstrates that it is possible to capture this economic reality through legal concepts, and with the development of the DeFi ecosystem, traditional legal concepts could potentially evolve faster than anticipated.”

Sébastien Derivaux, Strategic Finance at MakerDAO said: “This transaction represents Societe Generale’s first involvement with a DeFi protocol. Concluding this transaction with a subsidiary of the third largest bank in France by total assets, and one of the world’s most renowned financial services institutions, has been hugely informative for MakerDAO. The protocol is now equipped with the processes, legal frameworks and knowledge to enable more integrations with other leaders in banking. It marks a significant milestone in MakerDAO’s real-world asset strategy, as well as being a landmark in the merging of DeFi and TradFi to create a new era for finance.”

About SG-FORGE
SG-FORGE, a fully integrated subsidiary of Societe Generale group’s, licensed as an investment firm under the supervision of the Prudential Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution), authorized to perform MiFID investment services by the Financial Market Authority (Autorité des Marchés Financiers) and registered as PSAN (“Prestataire de Services sur Actifs Numériques” / Digital Asset Service Provider), has built an open, secure and institutional-grade framework for digital asset operations, underpinned by full banking level safety and regulatory compliance.
SG–FORGE provides issuers and investors end-to-end services to issue, invest and manage digital-native Security Tokens registered on public blockchains.
SG–FORGE’s Security Tokens comply with the CAST[1] open-source interoperability and securitisation framework.
For more information, visit www.sgforge.com and www.cast-framework.com
[1]https://www.cast-framework.com/wp-content/uploads/2021/05/CAST-White-Paper-1.0_Final_17-05-2021.pdf


About MakerDAO
MakerDAO is the decentralized autonomous organization (DAO) that powers the longest-standing DeFi lending protocol and enables the creation of DAI, the original decentralized stablecoin.
Governance of MakerDAO is completely decentralized, with proposals tabled and voted on by the Maker Community, comprising people from all over the world. Utilizing an embedded governance mechanism, the decentralized and self-sustaining Maker Community holds sole authority to enact changes to the Maker Protocol through on-chain voting, using the native governance token, MKR.


About Maker Vaults
Maker Vaults are an essential component of the MakerDAO DeFi ecosystem that enables owners to deposit collateral and generate DAI, the original decentralized stablecoin. The protocol accepts both crypto and real-world assets as collateral for loans. The Maker Protocol also offers Institutional Vaults for TradFi and DeFi organizations to secure predictable rates of returns and access loans with the highest standards of fairness and transparency. The Maker Direct Deposit DAI Module (D3M) is a type of Maker Vault that provides liquidity to third-party lending protocols.

makerdao.com

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