Introduction to Arf

Arf is a regulated liquidity platform, offering digital asset-based working capital credit lines to licensed financial institutions worldwide.

Arf Credit Line, live since November 2022, revolutionizes the way cross-border payments are made by providing onchain liquidity solutions for financial institutions. This initiative facilitates immediate USDC-based settlements, eliminating the need for pre-funding accounts globally (currently resulting in $4 trillion worth of locked up capital worldwide). This solution offers receivable-backed lending onchain and tokenizes cross-border payment orders, setting a new standard for transparency and traceability in the industry. Arf Credit Line, proven as one of the strongest use cases of RWA tokenization, is designed to increase access to liquidity for regulated institutions from all around the world by leveraging web3 transparency.

During the first ten months of operation, the credit line product has provided over +$300m in loans and created $444m in onchain volume. Currently, Arf provides a $50m loan per month on a facility size of $12m with repayment cycles as short as 2-5 days on average. As the business model is exclusively available to licensed financial institutions with consistently low default rates(1), Arf has experienced no defaults or late payments on the platform ever since inception.

Please refer to the onchain and offchain dashboards below (with a summary table as of 14 September 2023):

Onchain dashboard:

Onchain + offchain dashboard:


With a pipeline of new customers waiting to reap the benefits the liquidity financing product, Arf has the potential to grow 5x this year only and 20x by the end of next year in terms of monthly loan volume.

(1) Default rate of financial institutions is historically very low (0.23% in 2020, 0.14% in 2021, 0.28% in 2022) according to Default, Transition, and Recovery: 2022 Annual Report.

All our customers undergo a well-vetted credit risk review headed by ex-ING and ex-Experian Credit Risk Lead, signed off by at least one co-founder present in the discussions. Ahead of periodic credit committees, all potential customers’ last two year historical performance and 1-year projected outlook are assessed in terms of profitability, leverage, liquidity, risk and solvency and efficiency ratios. The proprietary credit scoring matrix analyzing all key ratios within cross border payments context are weighted and a risk score is calculated. Transparency of on-chain transactions within the iterative credit and repayment operations provide us with a unique capability to continuously assess and manage risk.

There is extensive due diligence checks on FI clients that we are engaging with (both at onboarding and on a daily basis). Additionally, we conduct checks on the payout partners we are extending the liquidity to. This comes in the form of reviewing commercial agreements proving the contractual relationship between our client FI and its payout partner as well as validating the stablecoin & fiat account activities / wallet accounts between them.

Roadmap for Arf
Having a proven use case and product market fit, Arf is looking forward to the next chapter of growth and has put together a clear roadmap to achieve in the next 1-2 years.

1st milestone (Kick-off Q4 2022): Proving the Use Case – $50m monthly loan
● With our first debt commitment received from a Web3 LP fund in 2022, we extended our product to a solid client base, including but not limited to a high-growth and pure-digital VC-backed cross border payment service provider with over 5 million customers.

2nd milestone (Kick-off Q3 2023): Finalization of Onchain Transparency initiative to prove Full Traceability – $500m monthly loan
● A couple of private credit pools on decentralized platforms have vouched to support our journey and have become an important source of capital for us.
● The Onchain Transparency initiative currently being developed is set to provide full visibility of multiple lenders’ funds represented onchain as credits and repayments linked to relevant receivables.

3rd milestone (Kick-off Q4 2023): Expanding our Lender Base and Securing Sizeable Loan Facility from TradFi for $1b monthly loan
● We have initiated discussions regarding securitization structure that will enable us to attract investment from institutional investors worldwide through Exchange-Traded Products listed in Swiss exchanges, tied to onchain receivables as underlyings. Once finalized, the product will serve to commoditize the liquidity need for the entire cross-border payments industry.
● We intend to finalize the set-up of SPC and SPV structures in US, Cayman and Singapore.
● Getting a debt commitment from a TradFi and bringing the funds onchain after a proven solid use case and building a deeper lender/client base is our ultimate goal for attaining our desired loan book.

Founding Team & Experience
Ali Erhat Nalbant (Co-founder & CEO)
Ali is an entrepreneur, former software developer, and consultant with a portfolio of over twenty-five international clients in the EMEA region
● Founded multiple startups in lending, crypto, and personal finance industries
● Launched and led the Istanbul branch of The Founder Institute, the world’s largest pre-seed startup accelerator
● Continues to serve as a guest lecturer for entrepreneurship at various universities

Kazım Rıfat Özyılmaz (Co-founder, Blockchain, Product and Strategy)
Kazım is a technical expert, manager, and entrepreneur known for his innovative approach and problem-solving skills
● +20 years of experience in tech leadership and software development
● Ongoing Ph.D. in blockchain
● Spearheading the Onchain Transparency initiative at Arf

Ahmet Özcan (Co-founder, Tech Stack)
Ahmet is a highly experienced programmer who comes from the roots of this field
● Hands-on executive with a record of leading full-stack development & embedded systems
● The primary developer responsible for the initial programming stages of Arf product MVPs

Key Differentiation Factors
Unlimited in amount and geography: Arf is a regulated financial institution that can onboard financial institutions from around the world and offer them payment, settlement, FX, lending, and custody services without limitations in fiat and stablecoins. This is a result of Arf’s unique business model design.
Not a “balance sheet” loan: Arf can be involved in the flow of funds for the treasury operations of its clients and their partners, as it is licensed to provide settlement services in both fiat and digital assets. This license allows Arf to credit its client but move the funds to its partners’ accounts for settling related receivables.
Full control: Thanks to our Onchain Transparency initiative explained below, lenders can now opt-in or -out to fund various cross-border payment types (B2B, C2C, B2C, C2B) and preferred corridors, with an average loan duration ranging from 1-5 days. This is only possible and commercially viable through the use of stablecoins in full compliance.
Access to global capital: Financial institutions in cross-border payments can typically only access a local lending arrangement within the country they operate. Arf enables access to global liquidity ranging from TradFi to DeFi lenders from all around the world.
Securitization: The transaction orders as receivables are valid payment orders with the funds deposited into the client’s bank account.


Hi @alierhat, welcome to the community! Looking forward to hear more from you! :wave:

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Very cool to see.

Two quick questions from me

2nd Milestone – could you help us understand how successful / near completion this milestone is? The ability to see as much as possible of the loan activity, asset origination, and performance of the underlying I think would make this conversation / partnership most interesting.

3rd Milestone - Tradfi partner? Why not bring the Tradfi partner into the Centrifuge ecosystem and they fund your facility on Centrifuge? What would that take to be possible? What roadblocks exist to making that feasible?

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Hey @ctcunning,
Thank you for the insightful questions raised.

Arf is already live with one DeFi pool, where a preliminary version of the receivable data is on-chain for every credit operation. As for the Onchain Transparency initiative - where all loan requests, funding sources, respective credit and repayment transactions (with maturity dates attached) are visible - we are at testnet stage and mainnet deployment will be planned for next month.

The traction and trust we have built with Web3 private credit pools needs to achieve much larger scale by communicating with TradFi. Arf aims to tap the larger capital commitments from TradFi and translate these to Web3 & DeFi by showcasing the transparency level and track record achieved through the onchain transparency initiative. To that end, we are happy to deploy TradFi partners’ capital through Centrifuge platform - there are no major roadblocks to achieving that except for understanding the setup and scalability potential from a legal perspective.

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