Elysia Introduction

Real World Assets Intros & Opportunities
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Hello, My name is Sangmin Yoo and I wanted to introduce our firm to the community. We are Elysia and we are working on a project to bridge the gap between the real estate market and the crypto financial market. We are looking to onboard the Centrifuge pool as an Asset Originator and would like to provide a brief overview of our project before submitting the onboarding document. We have been developing Elyfi, a service that uses Wyoming-based DAO LLC to bring real-world assets into the crypto financial market and use them as collateral. We are hoping to leverage Centrifuge to access more capital. To this end, we are collaborating with various P2P companies that have obtained licenses for online investment-linked financial services in South Korea. Below, you will find information regarding the P2P companies that are working with us.

The two P2P companies we are working with are as follows:

  • Company A: Cumulative loans amounting to approximately KRW 1.6 trillion($1.3 billion), with an average yield of 10.4%.
  • Company B: Cumulative loans amounting to approximately KRW 1.5 trillion($1.2 billion), with an average yield of 10.48%.

The asset we plan to collateralize is Korea’s real estate mortgage-based principal and interest receivables. Principal and interest receivables are financial instruments derived from a loan bond, with the right to receive both principal and interest. In order to issue such receivables, P2P Financing Firms must be registered with the Financial Services Commission (FSC) and follow the government’s bill “the Act on Online Investment-linked Financial Business and Protection of Users” for protecting the investors.

Note: the rights held by principal and interest receivables.

  • Beneficial Interest: Beneficial Interest refers to the right to receive principal and interest. The borrower pays investors monthly interest, excluding platform fees and taxes.
  • Preferred Repayment Rights : Preferred Repayment Rights, provided for under The Act, give investors preferential repayment rights for linked loan bonds. This certificate of rights protects investors from the company’s creditors in the event of a P2P company bankruptcy.

Our strength is that we select very high quality assets from the products that P2P companies have through the DAO structure and invest in them. Furthermore, the P2P financial companies we are working with are officially certified companies by the financial authorities.

  • Default rate: 0%

Korean P2P financial companies must pass the criteria from the government in terms of investor protection and integrity. Through this, it strengthens the investor protection and investors can get their money back even in the case of the bankruptcy of the P2P financial companies.

For further details, please refer to the POP we are preparing. If you have any questions before then, please feel free to ask them in the thread below.

Before we proceed with the onboarding process, we have a few questions. Firstly, we understand that there have been changes to the onboarding process recently. As far as I know, the Version 1 onboarding process required submitting a POP to the Centrifuge forum and receiving more than 66 POP scores. We understand that the new version requires a template for POP V2 to be submitted. Does this template need to be posted on the forum in the same manner as before?

We have noticed on the centrifuge medium that Flowcarbon has been reviewed by Credit Group. Where can I find the POP V2 they have submitted? I am unable to locate their POP on the forum. Additionally, some items have been added to V2, and I am wondering if they are evaluated using the same score system as POP V1. For example, a new query about crypto business experience has been added. Is this included in the score evaluation criteria? If there are any additional detailed guidelines apart from those in the POP V2 RFC, please provide them. Additionally, if there is any channel for communication with Credit Group, kindly let me know.

If there is a link I can refer to for certain parts, that would be ideal. We are currently also working with companies that offer high-yield financial products. We believe we can provide a good product if you are interested. Thank you.

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Hi Sangmin. Thanks for introducing your business in detail to the Centrifuge community.

Yes, it is true the first version of the POP-proposal required other information needed and the process slightly changed. The V2 of the POP hasn’t been approved yet by the governance and can be implemented only after the community voted on it.

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You can see the full RFC in the forum and it is open for feedback and comments. Please add your remarks if you have any:

I kindly refer to the Pool party from Flowcarbon where they presented their business to the community. Flowcarbon announced a parthership with Centrifuge earlier so they didn’t go through the POP:

As well I share the link as you requested to the Credit group and the introduction of their members:

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Hi @Tjure07 thank you so much for your quick response. I have a question regarding the POP version - which version would you recommend I use to start the onboarding process, POP V1 or POP V2? Also, could you provide me with an in-depth roadmap for creating a partnership with Flowcarbon?
I really appreciate your help and attention to this matter.

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Hi @yoosm. No problem at all, glad to help. Frankly I wouldn’t recommend to start a POP right now before the V2 has been approved. As I wrote previously it is in progress and not live yet but should be approved by the governance within a few weeks.
There is no specific roadmap for creating a partnership or open process (afaIk) but Flowcarbon and Blocktower are early partners with Centrifuge

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Thanks @Tjure07. It’s better to prepare POP V2! There is no fixed roadmap for partnership. I also wonder if we can proceed with the partnership. Do you have any recommendations on who to talk to?

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I recommend to wait until V2 of the POP-process is live which should be soon.

It depends which kind of a partnership you want to create but I can tag @sirj to start with

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Hi @yoosm,

I totally agree with everything @Tjure07 has mentioned above. With real world assets I am tad confused of the inclusion of P2P lending. Wouldn’t that expose investors to greater risk with volatility in the crypto market? I would love to learn more of this approach. Generally, a pool has a pool issuer who manages the pool (This issuer is structured as an SPV to legally protect investors and hold all the RWAs in case of the event of default or collections). Then the pool lends to an asset originator who fulfill the loan to the end borrower.

Additionally, please note that pools must provide a majority (if not all) of the Junior tranche to protect investors and we generally recommend somewhere that being around 30% of the pool if not more. You will also need to come with a bulk of your own senior investors to invest in the senior tranche as there is no guarantee of participation of current investors on the platform.

As it relates to @Flowcarbon I am a tad confused of the use case here but you should be able to tag them here on the forum.

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@Tjure07 Thank you for your answer, and as you said, we will support the V2 process after it is confirmed by governance. Until then, we will continue to look for cases internally and prepare POP V2. We will ask questions through forums or discodes in-between. Thank you again!

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Hi @sirj. Thank you for the clear explanation. I now have a better understanding.
In response to your concern about volatility, it is important to note that, differently from the US, the P2P market in Korea is primarily focused on real estate mortgage loans, rather than personal credit. This means that it is considered a safer product due to the presence of collateral.
Regarding the SPV structure and subordinated tranche investment that you mentioned, we will do further research and present a well-prepared proposal to POP 2.

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@yoosm thanks for the reply. For P2P Mortgage market, is there legal documentation linking the on-chain and off-chain asset rights?

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@yoosm thanks for your introduction! Glad to see your interest in pursuing a POP and cool to see the project background. South Korea is a fascinating place for tech innovation, so awesome to see.

I want to provide some insight here on the state of funding in the Centrifuge ecosystem. As you know, market conditions are not very favorable and so lending liquidity is tight, especially in emerging on-chain ecosystems such as ours.

To submit a strong POP in the current state, I would recommend an issuer being able to source outside investment capital.

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Hi @sirj. Regarding the part that connects rights to the blockchain market, there is a ‘right to receive principal and interest payments’ as mentioned above.
As NFTs that include the ‘right to receive principal and interest payments’ are issued and the SPV of the pool has it, legal rights can be linked to the blockchain market. As mentioned, we understood the Centrifuge structure and designed our structure, but how do other companies solve those connections?

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Thank you, @akhan, for your attention and for sharing your insights with us!
We will try to melt it well in our project proposal by referring to the insight you gave us.
Please continue to watch our project’s progress. Thanks again!

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@Tjure07 Hello, I am one of the members of Elysia. Recently, our members are brainstorming every week about POP v2 and sharing many ideas. I would like to ask a question. That is the part about “$ Volume of Origination Pipeline Last 12 months”. I want to know specifically what “Pipeline” means here. thanks.

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Hi @jihae.Lee, thank you for your question.

@ctcunning, could you please clarify this?

Cheers!

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How much debt have you financed through your business in the last 12 months?

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@ctcunning Thank you for ur answer. I want to ask one more question. The two questions in POP v2 seem to be similar after all. Can you tell me what the difference is? The question are below.

  1. $ Volume of Transactions Completed Last 12 months
  2. $ Volume of Origination Pipeline Last 12 months == How much debt have you financed through your business in the last 12 months?

For question 2, which company’s loan are you referring to? For example, we are doing P2P investing, and I wonder if we mean Elysia or a P2P company?

We translated it into Korean, so there are a lot of confusing parts. Please understand :slight_smile:

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Hi there,

We mean Elysia.

Question 1 - how much debt have you financed in the last 12 months?
Questions 2 - how much debt have you originated (but perhaps not financed) in the last 12 months?