MakerDAO, the organization behind stablecoin known as DAI, has signaled strong support for two new collateral proposals for loans that include real-world assets (RWAs) for the first time in the history of the cryptocurrency ecosystem. The vote, which concluded on June 8, paves the way for these tokens to be used as collateral for minting Dai.
Holders of MakerDAO’s governance token (MKR), decided to say 'yes' to these two new mortgage proposals led by Centrifuge, which has developed a deal that allows users to convert real assets into securities that can issue ERC20 tokens.
“These should be seen as the first two (RWAs) in the greatest portfolio of assets that’s ever been built. It is just the first step. Thousands and thousands of assets will exist alongside them.” said Rune Christensen, founder of the MakerDAO project.
Centrifuge is teaming with trade finance startup ConsolFreight to tokenize freight shipping invoices (invoice factoring and reverse factoring). This means they will add large amounts of debt likely using up the assigned debt ceiling for the collateral type while paying an attractive stability fee.
Centrifuge is also teaming with Paperchain, a startup which makes musicians’ royalty payments from Spotify, Soundcloud, Youtube and many others instantly available. It is the easiest and fastest way for creators and media companies to access their streaming revenue. Paperchain’s mission is to solve the problem of expensive capital and long-pay cycles in the media industry through a new model of decentralized lending.
Tinlake: Tin & Drop, two Tokens
Tinlake is Centrifuge’s smart contract framework for bundling loans collateralized by NFTs.
As an asset originator, you can use Tinlake to turn assets like car loans, trade invoices or music royalties into non-fungible tokens (NFTs) with all of the necessary legal documentation attached, create an asset pool (securitization), and then issue two kinds of ERC20 tokens (Tin tokens and Drop tokens).
Centrifuge CEO Lucas Vogelsang says the process is akin to issuing a “junior tranche” and a “senior tranche” of securities, a common approach in traditional finance. The junior tranche (Tin) is riskier but can pay a higher return. The senior tranch (Drop) is more stable and less risky.
Asset originators will hold some amount Tin tokens themselves, to have some “skin in the game”. Other Tin investors will probably be sophisticated traders who understand the real-world asset class well and want to have leveraged exposure. Drop tokens, meanwhile, are meant for further use in the DeFi world.
According to Vogelsang, Centrifuge and its partners will now begin work to determine which oracles to use, develop risk models, and review the security of smart contracts. This will take between one week and two months.
The vote also affirmed community support for the 0xProject (ZRX), Decentraland (MANA), keep_project (tBTC), and Uniswap token (UNI-V1-DAI), as collaterals on the MakerDAO platform. The results do not mean an immediate addition of new collateral into the protocol, but it shows the community interest. A final executive vote will be required before a definitive addition.
https://makerdao.com/
https://centrifuge.io/
https://www.consolfreight.io/
https://paperchain.io/
