Hi @davidbentzon, thank you for your post and welcome to the community! These are great questions and I think the information would be very valuable for others as well.
Q1. What are alternative solutions that asset originators use to unlock liquidity today? How do they fall short compared to Centrifuge?
Credit is essential for a functioning economy and is a key driver for business growth. In today’s financial system, only the largest businesses get direct access to liquid capital markets. Most depend on banks, non-bank lenders, and private capital sources 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. The average cost of capital for the Global 2000 is ~1%, compared to >15% for SMEs. This cannot be explained by the average default rate of SMEs of ~2%. The lack of an open and transparent marketplace denies SMEs access to competitive borrowing rates.
We provide access to both investors that traditionally would not have access to this type of market and a unique source of capital with less barriers and lower rates.
Q2. Why did you choose a blockchain-based solution for this problem?
We chose to use blockchain to solve this problem because it enables multiple parties to achieve agreement on shared information without a trusted intermediary. In the traditional credit market, financing real world assets requires many intermediaries to function, such as in the case of a bond issuance, intermediaries include a lead manager, managers, lawyers, paying agents, fiscal agents, auditors, registrars, transfer agents, calculation agents, listing agents, rating agents, and process agents. All of these intermediaries add to the upfront and ongoing costs, increasing the barriers for small and medium enterprises compared to large corporations who as discussed above already have lower costs of capital. It is also very inefficient and slow.
Q3. Why do asset originators care about increased liquidity? (bonus points for specific use cases from current/previous asset originators)
Issuers provide loans to Asset Originators in the real world by bringing the AO’s asset on chain and funding it from the pool. The more liquidity available in the pool the more assets they can fund, which will create a greater return for pool participants.
For specific use cases I would encourage our current issuers to chime in @Harbor @JeremyKim @prankstr25 @alec_caurisfinance @AleG @ErnestoVila @Stu
Q4. Can NFTs representing RWAs be enforced in a court of law?
For this question, I would refer you to point 1 from this fantastic answer provided by @Eli previously Real World legal questions regarding NFT's & Smart Contracts - #6 by Eli
I hope this provides you with further clarity and a glimpse into the motivators that push us to be all in on RWAs 