How to become a pool issuer on the Centrifuge App

Hello, and welcome to another update.

This week @mser has written an explanation update for us about how to become a pool issuer:

In last week’s post by @Esther_Centrifuge, we got a quick guide on how pools, tranches and tokens work together. For illustration, Esther created a sample pool after her fictional company was greenlit to become an issuer on Centrifuge.

This post will explain how to apply to become an issuer.

To start, an issuer in our ecosystem is a “lender to lenders.” In traditional finance, such firms might raise capital from a bank and specialize in underwriting assets and risk in respect to loans originated by specialty lenders that focus on a particular segment of the economy.

Centrifuge enables these issuers to raise capital through DeFi instead of through a traditional bank or alternative lender. They do this by tokenizing their “assets” – loans made to specialty lenders –and posting these tokens (NFTs) as collateral to get liquidity and make further loans.

The first step to becoming an issuer on the Centrifuge App is to submit a Pool Onboarding Proposal (POP). The POP is how issuers introduce their firm, operating history, as well as their proposed pool structure. You can read more about the process on the forum.

Once you’ve posted your POP on the Centrifuge governance forum, passed the community vote and a risk assessment, you’re ready for onboarding!

Onboarding consists of three main parts (see this PDF for details):

  1. Legal Structure – set up theSpecial Purpose Vehicle (SPV), bank accounts, on/off ramps, executive summary, subscription documentation, operating and service agreements.
  2. Pool Structure – set the pool economics, define the pricing and risk groups, and establish the write-off schedule.
  3. Technical Deployment – k/factory team takes Legal Structure and Pool Structure inputs and deploys smart contracts and UI for your pool.

Once your pool is deployed, you can mint your first NFTs, onboard your first investors, and begin to grow your pool as you finance your real world assets through DeFi!

That’s all for now - as usual, please add any questions in the thread :hammer_and_wrench: :v:

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Thanks for the update. I like the checklist, this is something new asset originators asked for several times. Very good structured and it gives a clear understanding what needs to be prepared as well which business are not suitable to be onboarded

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