Centrifuge <> Cinch Protocol: detailed plan to grow investor liquidity

Product
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Summary

  • Growing investor liquidity is the DAOs highest priority
  • The best possible investors are institutional investors
    • They write large checks
    • They are reluctant to move funds once deployed (sticky)
  • Institutional investors need incentive to deploy capital
  • Cinch allows protocols to create a temporary revenue-share on top of individual yield products
  • Cinch has an extensive network of institutional investors looking to deploy capital into attractive risk-return yield opportunities
  • We propose adding Centrifuge to our list of launch partners for introductions to our network of institutional investors

Motivation

The fastest way to grow the investor liquidity is to attract institutional capital. A few large investors can materially increase TVL. More importantly, institutional investors are reluctant to move funds once deposited.

The problem is that institutional investors are difficult to access: identifying the right institutions, getting access to them, and convincing them to trust Centrifuge is a difficult and lengthy process. This problem is not specific to Centrifuge; customer acquisition is one of the more challenging aspects of managing and growing a DeFi protocol.

Cinch Protocol

We are an early stage protocol weeks away from a soft launch. Cinch’s mission is to help DeFi projects scale without issuing native tokens.

Our platform helps protocols grow TVL by using revenue-based incentives to attract institutional investors. Protocols can design temporary, product-specific revenue-share opportunities that are easy to implement via the Cinch application.

As part of our launch partner program we are in contact with many institutions that actively seek yield opportunities on-chain: Aurora Fund, Crypto Yield Capital, DeZy, LedgerPrime, Outlet Finance, and Stablecorp to name a few.

Cinch Protocol <> Centrifuge

We would like to invite Centrifuge to join our launch partner program and list Tinlake pools on our platform. As an early partner we will introduce the Centrifuge team to our network of institutional investors and will actively promote the listed Tinlake pools to new institutional investors we approach.

Benefits to Centrifuge

  • Clearly defined and actionable strategy to increase investor liquidity
  • Creates pipeline of institutional investors
  • Sustainable liquidity for borrowers and existing investors
  • Promotable partnerships and brand affiliations with individual investors
  • No resources required from Centrifuge (time, capital, etc.)

Next steps

Our investor partners are actively seeking deployment opportunities like Tinlake pools. We would be happy to introduce the Centrifuge team to these investors and are currently doing so with our other launch partners.

We look forward to receiving feedback from the community!

Best,
Max LS

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Hi Max!

Welcome to the Centrifuge ecosystem and your proposal which sounds very interesting. As your protocol is still in its infancy/early stage I am curious to know more about your business model.

Especially the use case as a “Revenue token” drew my intention. What exactly does this mean and how does Centrifuge with its three token model (TIN/DROP as investment tranches plus the governance token) fit into this?
Plus how can investors profit from your platform?

Thanks in advance!

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@Tjure07 Thanks for reading through my post attentively! Happy to clarify:

Our app makes it possible for Centrifuge to implement a fee-sharing mechanism with specified institutional investors. This revenue-based incentive will have a predetermined and automatic expiry mechanism (either a maximum $ amount or a maximum time period).

We work with many institutional investors that could deploy large sums into DROP tokens. Attracting this kind of investor would increase liquidity for existing pool investors and support Centrifuge in deploying additional pools.

Institutional investors are attracted to the DROP token due to its improved return profile, and Centrifuge can rapidly grow investor TVL in new and existing pools.

While fees on Tinlake pools haven’t been implemented yet, we would be happy to begin connecting Centrifuge to institutional investors in our network as one of our launch partners.

Please don’t hesitate if you have any further questions!

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@Tjure07 to be abundantly clear: by “launch partner” we simply mean we’d love to introduce the Centrifuge team to the investors in our network. This would cost Centrifuge nothing in terms of time or resources and any potential transaction with an investor is under NO obligation to happen via our app.

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Thanks @Habs4lyfe I think that’s a really important clarification. On that basis, I think it would be interesting for you to connect with the K/F team (the main development team) and start discussing a potential integration. The protocol is always seeking new and innovative capital sources, so I think this would fit well. One question I would have - would you view the revenue share on the longer-term as something that you would negotiate with the Centrifuge protocol or the pool issuers which receive the capital?

I will conenct you with the relevant peoeple re integration.

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@thespaceacatjr that would be great. Getting connected with the K/F team sounds like the right next step.

We view the revenue-share, when eventually implemented, as something determined between Centrifuge and the investor.

Let me know if you have any further questions.

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