Introducing Decentralized Asset Finance: Onboarding the World to DeFi
Let’s dismantle the existing financial infrastructure, strip it down, and reassemble it for the 21st century. Today we launch Centrifuge: the Decentralized Asset Financing Protocol.
Decentralized Finance (DeFi) leverages decentralized networks to transform old financial products into trustless and transparent protocols that run without intermediaries.
When we started building Centrifuge in early 2018, the term DeFi didn’t exist. We were excited to bring Trade Finance into Ethereum and knew that in doing so we would open cryptocurrencies and blockchains to a new audience. Since then, DeFi has turned into the fastest-growing segment in crypto. Centrifuge finds itself in the middle of a young ecosystem that is ready to prove itself in the finance world: by building what we need to safely lend against real-world assets, businesses around the world can tap into this new source of capital.
Launching Today
Our launch revolves around two major releases: our asset-backed lending Dapp called Tinlake and the general availability of the Centrifuge Chain mainnet.
Tinlake is our securitization Dapp on Ethereum which lets investors and borrowers finance their own asset pools. Tinlake’s smart contracts are open source and integrate easily into the DeFi ecosystem. Tinlake uses Centrifuge Chain to originate individual non-fungible assets used as collateral for loans.
Centrifuge Chain is our open and permissionless Proof-of-Stake blockchain built on Substrate. This is the starting point for originating real-world assets. It enables users to bring their assets on-chain as non-fungible tokens (NFTs). NFTs are easily bridged to Ethereum from day one. The chain is powered by the Radial token, which empowers its holder with governance and provides the incentive for validators to operate it. We are proud to launch with over 10 validators securing our chain.
Tinlake + Centrifuge Chain = Centrifuge 🌀
With Centrifuge Chain and Tinlake, any business can now originate their real-world asset on-chain and access liquidity through Centrifuge.
Our First Two Pools are Spinning
Here’s a look into the future of asset financing: Asset originators launch their Tinlake pools, making them available to anyone to invest. Investors can browse through a list of pools to finance based on asset type and risk. All of this happens without any third party; transactions are settled trustlessly on-chain. Here a bit on two of our first pools:
- ConsolFreight funded 49 freight invoices so far totaling 278k Dai. Their pool for freight shipping invoices is now open for investment, check out more here.
- Paperchain finances streaming revenue to artists & labels. Their pool for Spotify invoices is now open for investment, check them out here.
Centrifuge is Evolving Asset Financing for the Fintech World
The fintech world is built on the centralized financial system: but the system is rigged in favor of big banks and large institutions. DeFi and blockchains can fix this. This is how:
Bankless: A borrower can receive a loan extended from a smart contract that lives online. Centrifuge builds a bridge for borrowers and investors to access a decentralized financial system.
More Liquidity: Today securitizations are expensive and therefore only done by larger corporations. Centrifuge’s automated process using smart contracts allows any business to pool their assets to create liquidity: from mortgages to SME invoices.
Flexible: Once onboarded in Tinlake, investors can immediately start investing in asset pools. Tinlake is built to eliminate bureaucracy and mitigate risk with better data and trustless technology.
Real-World Assets are the Missing Key to a Bigger DeFi
DeFi is hungry for new users and use cases. Assets in the real world are not measured in the millions but trillions. Here’s how Centrifuge’s new type of assets bring another dimension to DeFi:
Scaling DeFi: By originating assets on-chain, we are moving more of the world’s value into DeFi. Financing these NFT assets with stablecoins opens up DeFi to scale to the trillions. The more assets staked in DeFi, the more markets outside of the crypto bubble get pulled into DeFi.
Diversification = Decentralization: We can’t completely eliminate the centralized origin of real-world assets just yet, but we can diversify the types of assets that back DeFi currencies.
When BTC goes down, cryptocurrencies go down. Only adding other decentralized cryptocurrencies as collateral can pose a bigger threat than the risk of adding diversified real-world assets.
A New Way to Stake in DeFi: DROP and TIN are the ERC20 tokens Tinlake issues against a loan portfolio. These tokens are stable, backed by the individual loans, but also interest-bearing: this creates a new way to stake in DeFi . Read more about how this system works.
Building a New Foundation for Global Finance
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”- R. Buckminster Fuller
Centrifuge is changing the way the world accesses financing. We have cracked the code for financing any kind of asset with DeFi–unlocking capital for the world 🌎 🌏🌍 at a scale previously unimaginable. Our chain is built as a foundation for decentralized finance, providing the gateway for any real-world asset to enter the blockchain multiverse. Soon, these assets will be large enough that we won’t call them “real-world assets” anymore as all of the world’s assets will move in and out of blockchains. Join us in assembling the next generation of finance.
Get Involved
Asset originators are borrowers that collateralize invoices, royalties, and other real-world assets with Centrifuge. Normally they are liquidity providers for a specific asset class. Asset originators can start financing their assets by going to centrifuge.io/borrow.
Investors have the chance to earn attractive yield through asset pools with Centrifuge. Two pools are already spinning that investors can start funding. Head to centrifuge.io/invest to get started.
Both Centrifuge Chain and Tinlake.js are open source. Developers can build on top of Centrifuge Chain, and develop their products with it. Get started at developer.centrifuge.io.
Centrifuge will only be as strong as our community. Join the discussion at discourse.centrifuge.io to shape the future of asset financing.
