Could you please describe shortly different potential usecases for Centrifuge and how they actually utilize the platform?
For example receivables, music royalties, real estate, etc.
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All of the asset originators on Tinlake.centrifuge.io are a real-world use case of Centrifuge. They are all using the platform to finance their real world assets, such as music royalties (paperchain), invoices (consolfreight), trade invoices (harbor), cash advances (1754 factory), etc etc.
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Hi @rost1989, Tinlake is designed for Asset Originators that want to bridge their real world assets to DeFi. Here are a few different types of Asset Originators on Tinlake:
ConsolFreight: ConsolFreight focuses on invoice factoring and reverse factoring (aka, supply chain finance). There is a Buyer like a retailer who must arrange for the shipment of inventory to their store. They hire a Freight Forwarder (“FF”), which helps secure the Carriers (planes, trains, ships, or trucks) to get the good from the other side of the world into their store. ConsolFreight supports the FFs. In the case of invoice factoring, ConsolFreight will advance payment to the FFs and then collect from the Buyer 30-90 days depending on the terms of the invoice. This helps the FFs get paid faster. For reverse factoring ConsolFreight will advance payment to the Carriers and collect from the FFs. In this case, they may pay the Carrier on the 30th day (or sooner) but they allow the FF to pay in 60 or 90 days, allowing the FF extend payment terms. So for factoring ConsolFreight helps to shorten accounts receivable and for reverse factoring ConsolFreight helps to extend accounts payable for FFs.
Paperchain: Paperchain focuses on invoice factoring in the music category. A musician or the musician’s label counts all of the songs streamed for the month and delivers an invoice to Spotify for payment, which is due in 60 days. Paperchain will simply advance money to the musician or label and collects from Spotify in 60 days.
New Silver: New Silver focuses on residential fix and flips. A developer identifies a home that they want to purchase, renovate, and resell. The developer will put down 20-30% in equity and then will draw a 12 month “bridge” loan from New Silver the the remainder of the purchase. Once the home is fixed up the developer will either sell the property or refinance down to a lower rate mortgage.
In all three use cases the Asset Originators have created payment obligations where they have advanced money and are waiting to be repaid. They use Tinlake to tokenize their payment obligations into NFTs and then pool them and offer DROP and TIN tokens to DeFi investors who can get exposure to the yields generated by the underlying assets.
DROP and TIN tokens are ERC-20 tokens that are purchased by investors where the DROP token is a fixed interest rate and has the first priority of payments from the Asset Originator. The TIN token is subordinated in terms of payments and liquidation. Since the TIN takes the first loss, we ask the Asset Originator to invest in the TIN tranche to put skin in the game. The TIN acts as a buffer that protects the DROP tranche, which reduces the risk of investing in the DROP tokens.
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Wow, really cool. Especially with music category - “Paperchain”.
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