Hello Friends,
I just sized up my own pool, the GIG Pool, on the Centrifuge community call. I want to share my methodology with you here. I rated my pool a 5.1 on a scale of 10 so I have work to do to get my score up. I think I can significantly improve my rating over the next few months.
Launch Date: August 2021
Rating: 1
As you can see here, the first asset financed was on August 5, 2021, so this pool is less than a month old. The pool is brand new and we are still getting the infrastructure set-up so there is early stage risk. As a result, I give myself a 1.
Pool Size: $300k
Rating: 2
The Gig pool size is only $300k making it one of the smaller pools on Tinlake. This is to be expected since I only launched it earlier this month. I give it a rating of 2. Hopefully I will be able to scale assets relatively quickly and improve this score.
Yield: 6.1%
Rating: 7
The yield is 6.1%, which is the third highest on Tinlake. Only Branch and Bling have higher yields. I think I can get this yield up closer to 8%, so I will try to push this rating higher soon.
Liquidity: <90 days
Rating: 9
If there was ever a run on this pool where everyone wanted to cash out at the same time, you can remain calm knowing that the underlying assets payback in a maximum of 90 days, so you won’t have to wait too long for access to your money in a worst case scenario. However, the investment does not offer instant liquidity like ETH or BTC, which trade 24/7, so I give the GIG pool liquidity a rating of 9.
Protection: 20%
Rating: 8
The minimum TIN risk buffer is 20% meaning that 20% of the investments in the pool would need to fall to zero before the DROP tranche would begin to be impaired. That is pretty good downside protection, especially when considering that the GIG Pool counterparties that would fail to pay are Uber, Lyft, Spotify, Google, etc. The risk seems very low. Rating 8.
Execution: 66%
Rating: 2
This pool is sitting on a lot of cash, which is causing a drag on the overall return. That looks bad, but the reality is that it is temporary. We just brought in that cash in the last two weeks and we will be deploying it into yield generating investments today. That reserve ratio will fall significantly and the gap between assets financed and cash on hand will close. Today’s rating is 2 but that rating should be revised as soon as we deploy this cash.
Concentration: 1
Rating: 2
Take a look at the number of assets that have been financed on the asset list. There is only 1. So if you invest in this pool, you are really only investing in this one asset plus the prospect that the pool will begin investing in additional assets. In this case the one asset of $100k is a promissory note backed by about one thousand payment advances to individual gig workers. So, technically, there is some diversity already. Therefore I give it a rating of 2. Once this pool grows the assets will diversify and the rating should improve.
Experience: Me
Rating: 10
That is me with the biggest fireworks I could buy at South of the Border. It was awesome! Lol. Ok, but seriously, I have been investing in alternative credit for a very long time and I know defi really well. This is my sweet spot. I’ve got the cred. Ask around or reach our at jason@end-bridge.com
if you want to get to know me better before investing. Rating 10.
Overall Rating: 5.1
This is the average of the ratings.
So I rated my own pool and I gave it a 5.1. I have a lot of work to do to improve my rating.
Maybe someday someone else, a non-biased source, will rates all of the Tinlake pools. An entrepreneur should get to work. It would be a great service for the Centrifuge community!
If you want to learn more about sizing up Tinlake pools, check out my article here:
What do you think? What would you rate my pool?
JJ