The Iron Bank feature will allow protocols to borrow funds without posting collateral.
The Cream Finance project, a lending protocol that recently merged into the Yearn ecosystem, announced the upcoming launch of its Iron Bank feature, a name inspired by the once-popular TV show Game Of Thrones.
Cream’s Iron Bank is an attempt to create a DeFi equivalent of corporate debt. The announcement, released on Thursday, explains how the market for peer-to-peer lending in traditional finance, worth $70 billion, pales in comparison to the world of corporate credit, with $10 trillion in loans outstanding.
To create a similar industry in DeFi, Cream is now allowing other protocols to borrow funds without posting collateral. For risk management purposes, the system is not permissionless. Each single protocol needs to be whitelisted by Cream for a line of credit. The protocol is then able to borrow freely, until it reaches the credit limit set by Cream.
Currently, the assets available for borrowing are