My name is Ivan Zhang and I’m the CEO of PennyWorks, a financial platform that makes it easy for traditional investors to invest into DeFi in a compliant way.
Our mission is to drive broader adoption of DeFi. Our first product launched in ‘22 and allocated funds to established DeFi platforms that were liquid and fully overcollateralized. This strategy has served us well and we have navigated through '22 without suffering any losses despite the dramatic upheaval in the DeFi ecosystem.
As we look forward, we see there is a lot of capital that is sitting on the blockchain earning 2-3% on USD stables while US treasuries earn well above 5%. This means that there is a lack of quality investment alternatives within the ecosystem with too many dollars chasing too few opportunities.
Meanwhile, the Fed has hiked rates at the fastest pace in decades. Financial conditions have become tighter for all sorts of businesses, with small and medium enterprises (SMEs) particularly impacted.
Putting the two together, we think there is a huge opportunity for private credit to grow and we want to provide DeFi users the opportunity to fund successful traditional businesses.
We saw that the Centrifuge community has already built a wonderful platform that makes it easy for DeFi users to participate, which frees us to focus on finding quality investment opportunities.
We’ve currently working with veteran operators in the private credit space to create investment opportunities with attractive yields and a focus on safety. We’ll be completing our POP shortly to provide more details about the investment and we look forward to collaborate with the Centrifuge community to drive broader DeFi adoption!
Please do not hesitate to reach out if you have any questions!
I believe you and your co-founder have excellent credentials, and the product and branding appear 1st class. I would really like to see more security/audit detail and client/affiliate testimony, but that’s me being overly critical.
Excited to see further development to this proposal.
Thanks for the kind and considered message and look forward to seeing your proposal for partnership.
Thanks for the feedback, we are definitely working towards providing as much detail as we can in the POP, we are excited to share once everything lines up!
I have a few questions on the POP, legal templates and things like that, Imdior said you are the author, can we discuss via DM? Thanks!
Hi there! We’ll try and make all information available publicly so it’s easier to self-serve and get the answers you need!
As is the case most any time, the business/commercial opportunity typically drives the relevance and speed of the discussion, could you help us understand the commercial nature of this opportunity specifically and the process and timeline by which you would like to achieve that outcome?
Finally, on the assumption others have questions similar to yours, would you feel comfortable placing them in thread here for us to work out loud and serve others’ needs?
Thanks so much!
Hi @ivanz I don’t know if you have seen these docs, or if they are the ones you are referring to, but maybe you will find some of the answers to your legal questions there.
Legal Contract Templates
Thanks for that, yes, I have read them and have follow up questions about the legal templates.
For a little bit of context, the investment opportunity is a US-based factoring company with decades of track record. We are considering a Delaware SPV, however, we have questions about the senior/junior tranching.
This is a bit of a technical legal question, we will confirm with counsel as we get further along, but given many issuers on this platform are already operating with these tranches, it might be easier to ask here:
- The senior tranche has a fixed rate of interest, which means we can make use of portfolio debt exemption to avoid tax withholding for non-US persons.
- The junior tranche, on the other hand, is written in such a way to have variable payments which may not meet the requirements of the exemption.
How have other issuers dealt with this issue?
@prankstr25 @Stu @SpaceCatMiaux do any of you have any experience with this and can provide some insight to @ivanz? Cheers!
We had to take independent tax advice on how to treat oversea’s lenders as it depends on how you structure your loan book.
Great, would you mind sharing who you’ve dealt with in the past? Thanks!