Hey @hardik we’re working on a new process for financing real world assets through Centrifuge in a public, governance-driven process via the Forum. The process will have four steps.
Step 1: Application process
Step 2: Risk, quality and criteria needs to be analysed by the decentralised Centrifuge Credit Group
Step 3: Setup legal structure & pool economics
Step 4: Technical pool deployment
Over the next few weeks we will elaborate on these steps with forum posts and medium articles. I’m interested to hear opinions what others think how this process could look like.
Yes, you get my point. I’ll look at the step details and focus on the outcome of the event. I think just because it looks different from a normal centralized organization doesn’t mean it’s decentralized.
Through the link to the article you quoted, I went to read it. It’s a two-year-old article, but until now we haven’t seen clear results for some of its visions. Things like transparency, efficiency, whitelisting, repositories, etc.
Her words in the detailed description made me feel imprecise, the various generalizations, and the random collocation of different subjects and titles made it difficult for me to understand her description. It may be her superb literary writing style, but readers are worldwide and want to see expressions that avoid ambiguity.
It may be easier to understand if she can combine the existing pools and give examples to illustrate the details of the steps and the specific real numbers. @annamehr said she will write the article description, hope it won’t take too long.
I appreciate your proposed goals and incremental approach.
Speaking to people who are not yet investing in RWA on-chain, their concerns tend to be around A) not understanding the real world risks of the assets themselves (eg not being an expert in invoice financing) and B) believing that there are added risks involved in RWA protocols beyond those of most DeFi protocols (eg real world legal structure bridge to on-chain securitization, how to implement real world recourse etc).
I like this proposal because it seems like the Credit Group could increase trust and help people better understand the broader RWA x DeFi space. Bringing more 3rd party risk assessment and insights will only strengthen the RWA space in general. It is a key part of decentralisation. If the Credit Group starts coming to different conclusion to the risk assessment team at Centrifuge, or the RWA risk core unit at Maker, then great! That’s only going to help the community make more informed decisions, and keep each core unit on their toes.
I’d also like to see a key focus on:
We need to be able to articulate processes and risk both accurately and in an easily digestible way so both DeFi native folk and TradFi folk can understand the opportunity and its risks. A TradFi investor doesn’t necessarily understand ‘basic’ tenants of DeFi risk, and a DeFi investors doesn’t always understand typical risk inherent in real world assets, but both need to be clearly articulated so that the RWA space can thrive. Having this information arrived at and synthesised by a decentralised 3rd party entity should increase the accuracy and reliability of the information, compared to if it were compiled by one of the protocols themselves.
@Smile2u@mustermeiszer I hear you on the ‘skin in the game’ point and think it’s really important.
However that feels more necessary for Issuers or external underwriters /actors whom investors or protocols are taking sole advice from. It sounds like the purpose of the Credit Committee would be to add an authoritative and trusted voice, not the only voice, and not to actually commit capital themselves. The incentive here is for cross-protocol success and risk mitigation, not maximising upside or arriving at the most accurate pricing models for each pool.
This is equally important. Risk highlighted <> lack of expertise in either domain.
Also, not only the Credit DAO members (trafi or defi) but if the process is articulated simple that community members (not expertise) understand the risk associated and the mitigation measures proposed based on risk matrix, it should develop more confidence across the board. Not saying they don’t trust as of now , but the question such as default loan scenario , applicable jurisdiction laws, pricing of assets etc. would be answered as well. Just a point putting out since many still are new and there will be more community members in future as well.
These polls run for 3 days until 2022-05-02T00:00:00.000Z. Should the voting turnout be a clear result the council should proceed to propose a motion for a democracy vote.
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