Underwriting in DeFi - Study of current practices

Will Nuelle of Galaxy Digital talks at EthCC [5] in Paris about “Underwriting in DeFi - Study of current practices” and he explains Centrifuge and its underwriting mechanism

The full talk can be found on YouTube :point_down:


This talk was fascinating. Will brought up several great points about the process of underwriting and how the loans inside the Tinlake pools are not risk assessed individually.

I see his point as the actual loans in the lending pool are not evaluated. There is a missing risk assessment mechanism between the pool being approved by Centrifuge and the assets in the pool.

There should be another mechanism evaluating the ACTUAL investments being entered into the pool Not just assessing the asset originators creating the pool.

Each loan in the pool should be individually underwritten!

Thank you for sharing! @Tjure07


I agree, this talk was very interesting because he compared the mechanism of the (leading) protocols and I liked that he showed their weaknesses as well.
In a decentralized future, when DeFi becomes much bigger and reaches mass adoption, the protocols need to grow with their customer’s needs and I see Centrifuge on the right path

One example: the POP-process, to decentralize pool onboarding in Tinlake, started a few months ago and already attracted the first applications

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I agree! The POP process does a great job assessing the asset originators. However, Will’s point takes the POP process to the next level. There should be a screening process for every individual loan entered into the pool.

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Do you have any idea or recommendations how such a screening process can/should look like?

Every input and feedback is appreciated

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We could figure it out! LOL

I like his idea of incentivizing underwriters to choose the best investments.

Very complicated process, but it could be done,

Are you familiar with the proposal to increase the token utility btw?

This one is in progress and there might be some overlaps


Just took a read and I love the vision and feel it is going in the correct direction!

Origination fees would be huge. It would incentivize brokers to bring assets to the platform.

The only thing I would say is the origination fees need to be competitive with the fees in TradFi!!!

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