Cryptocurrency lending platform MakerDAO is voting on a new proposal to include another commercial bank in its ecosystem. This would improve the relationship between conventional finance and decentralized finance (DeFi).

According to the announcement made at the MakerDAO governance forum, Florida-based commercial bank Cogent Bank is considering making a $100 million contribution in the form of loans to MakerDAO’s RWA Master Participation Trust.

The proposal is part of MakerDAO’s monthly governance cycle and seeks to apply the same terms and conditions that applied to Pennsylvania-based Huntingdon Valley Bank (HVB). HVB entered into a collateral integration with the cryptocurrency company in July 2022, allowing the bank to borrow against its assets using DeFi. The proposal is part of the MakerDAO governance cycle and seeks to apply the same terms and conditions.

Under the same set of circumstances, MakerDAO would use its fiat arm to connect money easily accessible at Cogent Bank with MakerDAO’s stablecoin known as Dai (DAI). The trustee would be in charge of managing the cooperation with the bank as well as being responsible for overseeing the minting and destruction of DAI from the vault.

The DeFi protocol would gain exposure to the credit market in at least eight different categories, some of which include commercial real estate, industrial, life insurance, consumer and public finance. Most loans would have a set interest rate.

The fees charged for maintaining the vault, the fees charged for minting DAI, and the returns are all sources of income for MakerDAO. As of January 5, the standard rate for the 30-day average of the secured overnight loans was 4.15 percent.

Pinnacle Bank was the former name of what is now known as Cogent Bank prior to its purchase in 2018. The Federal Deposit Insurance Corporation backs the Florida financial institution, which oversees $1.3 billion worth of assets and is guaranteed by the agency. According to the information provided by the firm, the total amount of loans that began in the first three quarters of 2022 was $602 million, while in 2021 the total amount was $873 million.

MakerDAO has released a governance framework for its first partnership with a regular bank, which will be Huntingdon Valley Bank. This move was made in an effort to weather the crypto winter in 2022. At the time, the DeFi protocol had indicated its intentions to onboard more banks, but these ambitions depended on how well it integrated with HVB.