Credit Group Progress Update - Dec 2023

Hi everyone

As we settle into January 2024, I want to provide an update to what has been happening with the Credit Group in the last month of 2023.

December 2023 was a busy month for the Credit Group both in terms of visible output as well as work behind the scenes. Our effort has been concentrated on supporting Centrifuge teams to foster stronger relationships with our stakeholders.

From education to research, we have been having ongoing conversations with asset issuers as well as supporting capital allocators along their journey in understanding how Centrifuge’s various products can help them achieve their business objectives.

Below are highlights of key progress milestones for the month of December and context around their importance.

  1. Publication of the New Silver 3 POP Review

As Centrifuge’s deal pipeline scales, there is a growing need to have detailed and institutional grade reviews that bring various aspects of risks and business characteristics together through a single lens as an independent voice on potential deals.

Highlighting risks, disclosing any shortcomings and benchmarking against industry standards will provide a basic framework through which the audience can better understand and ask further questions in their allocation process.

This deal review report looked at key legal, financial and operational aspects of the proposed deal with information supplied by the issuer. This shall serve as a template on which we aim to iterate and improve.

Credit Group members with relevant experiences will continue to spearhead the effort on providing an independent credit analysis view point on these new exciting assets. If you have a credit background, feel free to get in touch. Together we will be shaping the future of finance.

  1. Publication of the Asset Primer Overview on US Treasuries

As we get to know more capital allocators, we realize there is an urgent need to have a comprehensive understanding of the biggest asset classes in the world. The thinking on fixed-income allocation remains incomplete and devoid of portfolio level investment strategy.

While the recent TVL growth in tokenization was driven by short-term US treasuries, there is a distinct lack of calibration of risk and performance across the entire asset class, let alone a diversification of allocation across the various maturity tenures.

The Primer on the US Treasuries provides a data-driven perspective on the risks and opportunities across the various maturities of this foundational asset class. And perhaps most importantly, it provides an illustrative comparison of historical return measured against per unit of risk across different maturities. Feel free to use it as a resource to complement your thinking on cross maturity allocations.

  1. Collaboration with the Business Development team on the Arbitrum Treasury Report

As Centrifuge builds ever closer relationships with allocators across the ecosystem, we are constantly uncovering evolving needs and demands of this important stakeholder group.

Supporting the Business Development team in their communication with potential allocators is a high impact activity for the Credit Group. The Arbitrum Treasury Perspective report is an example of such cross team collaborative effort.

In the report, you will find an useful overview of the US Treasuries, the US Investment Grade Credit and the US Mortgage Backed Securities asset classes.

Before we reach a state of standardized onboarding process that can scale across the allocator sector, we shall continue to provide bespoke and specific value-adds for allocators to help them in their journey.

As the market evolves, there will be many exciting opportunities for the Credit Group to spearhead initiatives and support the Centrifuge ecosystem. This will be a continuous journey. If you want to be kept up to date with what we are working on. Keep an eye on the forum. More monthly updates ahead!


Excellent work by Credit Group

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