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RWA Yield

Unlock the potential of blockchain for real-world assets! Our project seamlessly integrates with Maker SubDAOs to enable on-chain borrowing to fund investments in real world assets.

RWA Yield

Created At

ETHGlobal Paris

Winner of


🚇 MakerDAO — 🥈 Best Use of Conduits

Project Description

Our project primarily aims to bridge the gap between the decentralized finance (DeFi) space, particularly the MakerDAO ecosystem, and real-world assets (RWAs). It leverages the functionality of blockchain technology to make traditional asset classes compatible with DeFi protocols.

MakerDAO, the leading DeFi protocol, uses a permissionless and decentralized system to create a stablecoin called DAI, which is pegged to the US Dollar. It allows users to borrow DAI by locking up collateral in a smart contract. MakerDAO's SubDAOs are smaller, specialized organizations within the MakerDAO system, each focused on particular aspects of the broader ecosystem.

Our project's functionality comes into play here by allowing users to borrow funds from a Maker SubDAO. Instead of collateralizing only crypto-assets, users can also pledge real-world assets to receive DAI loans. This is achieved by tokenizing these real-world assets, thereby making them compatible with the blockchain environment.

This approach not only democratizes access to financial services but also provides the much-needed liquidity to traditional asset owners. Borrowers can take advantage of the inherent benefits of DeFi, such as transparency, efficiency, accessibility, and low transaction costs. Furthermore, it opens up the possibilities for innovative investment strategies and new ways to leverage the assets people already own.

In essence, our project serves as a robust bridge that intertwines the power of blockchain with the tangible value of real-world assets, aiming to redefine how we perceive and utilize wealth in the digital age.

How it's Made

Creating this project involved the strategic use of several technologies to build an automated dividend-paying borrowing protocol. At its core, the protocol functions by purchasing real-world securities represented by one of the security token standards, either ERC1400 or ERC3443.

Our approach was to build this system on the Ethereum blockchain, which enables smart contracts and token creation. We leveraged Solidity, Ethereum's native language, to develop the necessary smart contracts. These contracts handle various functions such as managing the dividend payments, enabling the withdrawal of dividends by the lenders, and interacting with the MakerDAO SubDAOs.

The securities we targeted can pay dividends to the security holder, which in our case, is a smart contract on our protocol. These dividends are then distributed to the lenders, who provided the ETH or DAI that was borrowed to purchase the security. In this way, the lenders are rewarded for their contribution to the protocol.

In our proof of concept (POC), MakerDAO SubDAOs acted as the lenders, and the security was represented by a simple treasury bond token. At this stage, the lenders had to withdraw dividends manually.

A noteworthy aspect of our project was the innovative use of ERC1343 tokens in automating the dividend withdrawal process. In the final product, ERC1343 tokens will be utilized to ensure that the process of withdrawing dividends is automated, providing a seamless experience for the lenders.

The project didn't use any specific sponsor technologies. Instead, it stands on the strength of Ethereum's smart contract functionality and the MakerDAO's lending infrastructure. These robust and well-established infrastructures have provided us with the necessary tools and flexibility to focus on the specific goal of our project - bridging the gap between DeFi lending protocols and real-world securities.

In conclusion, the architecture of our project demonstrates a creative and practical application of Ethereum and MakerDAO technologies, with the goal of automating a dividend-paying borrowing protocol that bridges the gap between traditional securities and the DeFi space.

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