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Centrifuge - Real-World DeFi

Centrifuge bridges real-world assets into DeFi (“Decentralized Finance”) to bring down the cost of capital for SMEs and provide DeFi investors with a stable source of yield uncorrelated from volatile crypto assets.

In today’s financial system, only the largest businesses get direct access to liquid capital markets. Most depend on banks for their capital needs. The lack of an open and transparent marketplace denies these smaller businesses access to competitive interest rates mostly due to market inefficiencies and transaction costs. null

DeFi is a growing financial system without any barriers of entry. Centrifuge wants to bring this benefit to all borrowers that until now had no access to DeFi liquidity.

With our first user facing product - Tinlake - Centrifuge allows anyone to launch an on-chain credit fund creating collateral-backed pools of loans. Tinlake offers an easy way into DeFi liquidity for any business. For DeFi investors, these assets will create a safe, stable yield for their money uncorrelated from attractive yet volatile returns in crypto markets. Through CFG Rewards, investors can farm additional yield and participate in the ecosystem.

Tinlake is currently built on Ethereum, however going forward it will be fully migrated to our Centrifuge Chain and our secure p2p protocol. This will allow accurate pricing and risk assessment of any kind of assets (be that your future revenue as a business, a house or some farm land) and create liquid markets for these assets. As this ecosystem grows, more data will be on chain reducing the trust in the off-chain world and reducing the dependence on a single point of failure.

We believe that Tinlake is only the first step. The Protocol we are building will enable use cases such as Deep Tier Finance fulfilling our vision to foster economic opportunity everywhere.

DeFi - the next financial system

DeFi is a decentralized financial system based on smart contracts that function without intermediaries, such as banks or insurances. DeFi applications strive to fulfill the services of traditional finance in a permissionless, global and transparent manner built primarily on the Ethereum blockchain.

It’s an entirely new economy being built without borders, banks, or government controlled currencies. Centrifuge is built inside of the DeFi economy and will soon have direct integrations with other DeFi protocols such as Maker or Aave, but it has also built a way for traditional finance to onboard easily: NFTs (“Non-fungible tokens”).

NFTs - the link to traditional finance

Unlike fungible tokens, such as bitcoin, ethereum, or dot, NFTs are non-fungible (“unique”). Centrifuge’s privacy-enabled NFTs are tokenized representations of individual assets, keeping some of the assets attributes private on a p2p protocol, while the Centrifuge Chain - a public, decentralized ledger - tracks the asset ownership. This structure allows us to create something unique in DeFi.

Centrifuge uses NFTs as a digital representation of real-world assets, such as an invoice or a mortgage so they can be used as collateral in Tinlake. This process of minting NFTs from real-world assets is traditional finance’s ticket to accessing DeFi liquidity and will have real world implications:

  1. Expands access to asset financing: going bankless lowers the barrier of entry for originating and investing in assets
  2. Scales asset financing: These pools can grow very big and create liquid marketplaces for illiquid assets.
  3. Creates a bridge between the real world and DeFi: We bridge the value from the real world over to DeFi, in turn adding new liquidity.