Challenges with invoices

I’ve watched Chico Crypto’s descriptions of Centrifuge, and I really like the idea of getting fast liquidity for real-world collateral. There are quite a few challenges for the team to solve though. Here are a few concerning the tokenization of an invoice:

  • How do we know the invoice is not a fake?
  • How do we know the invoice belongs to the person tokenizing it?
  • How do we know this invoice was not already tokenized before?
4 Likes

Hi @civ42,
Here is a link with more informations regarding your questions.Main challenges and potentials for Tinlake success
Best regards,

4 Likes

Thanks, here is an interesting quote from that thread:

> Every single asset in Tinlake is represented by an NFT. Every investor can check asset price (risk score) and performance in a daily updated NAV, which is completely novel. The Asset Originator providing the assets has to have skin in the came with investing in TIN (the junior tranch) and has to take first losses.

So the party tokenizing the invoice needs to hold/stake TIN as collateral. Presumably the amount of TIN determines the amount that they can borrow at any given time.

3 Likes

I think that would be the case, but they would be collaterizing DROP tokens (lower risk).
Here is another link explaining the relationship of TIN and DROP tokens.
DROP vs TIN - Differences
Hope this helps.

5 Likes

They may prefer DROP, but according to the quote, they are required to have TIN because it forces them to have more “skin in the game”: if there is a problem they are first in line to take losses.

2 Likes

Yes, you are entirely correct, and on tinlake each pool has a min ratio of DROP and TIN (for example 10%). If the rate of defaults in the pools is lower or equal to 10% your DROP holdings are protected by TIN holdings. I had a bit of a problem with the wording :slight_smile:

2 Likes