We’re taking Real-World Assets to the next level in DeFi. Again.
The goal of Centrifuge is to create infrastructure that will make DeFi the best place to borrow and lend money against real world assets (RWAs). That’s why we’re launching and scaling RWA pools on Centrifuge Chain. This is a key component of our recently laid-out roadmap.
This is a complete rewrite of our core product, going from “Tinlake on Ethereum” to “Pools on Centrifuge Chain.” Let’s take a look at why the “Pools” are the go-to choice for businesses who want to securitize their assets in DeFi.
1: Lower transaction fees
High transaction fees are painful. We’ve heard you, and we’re doing something about it. With Pools on Centrifuge Chain, you can access significantly lower, more stable costs compared to the Ethereum mainnet. The integration with Centrifuge’s chain offers up to 90% lower transaction fees.
2: Multiple tranches
Centrifuge was the first to implement tranching investment structure on chain. With Pools, you will be able to create multiple tranches to serve different types of investors. Tranches support different interest-rate models and are extremely flexible. Additional tranches can be added to active pools.
3: Launching pools faster
Pool issuers can create pools that fit their business model. Instead of deploying 20 different smart contracts, one can call a single transaction and it will create a pool. The multi-tenant system allows simpler creation and updates of pools. This enables much better customization.
4: Bridging liquidity to Polkadot and Ethereum
While Pool issuers use Centrifuge Chain to create pools and originate loans, Pool tokens can be bridged to wherever there is a need for liquidity. This means we are building bridges to Ethereum, Acala, Moonbeam as well as other DeFi ecosystems to give users on any chain the ability to purchase Pool tokens.
5: Access to more data
More data, graphs and visualizations available: subquery enables much better and more stable data handling.
6: Flexible loan model
Different loan types will better mirror asset cash flows. You can create bullet loans, credit lines (with and without a maturity date) and interest-paying loans. This allows more flexible valuation models as well.
A bullet loan is where a lump sum payment is made for the entirety of an outstanding loan amount, usually at maturity.
7: Better integration with our p2p network
This means better visibility of asset data which includes the underlying collateral and risk. Minting NFTs and creating assets will be available from the app in one user interface.
8: Index token(s)
“Pool of tokens” structures can allow investors to invest in a diversified portfolio of pool tokens and simplify the management of different investments across several pools. This will streamline the investment process for the end user.
9: Better epochs & batching transactions
Epochs can and will be closed regularly. This will lead to a higher certainty of transaction costs and time. Additionally, batching transactions will be much simpler, e.g. repaying multiple assets, batching interest payments, investing in multiple pools, etc.
10: Scalability
Pools on Centrifuge Chain will use the purpose-built and highly efficient runtime on Centrifuge Chain. Centrifuge stakeholders propose and approve upgrades through the on-chain governance system, which also enacts them autonomously.
As such, Centrifuge can upgrade its runtime by upgrading the logic stored on-chain, and this removes the coordination challenge of requiring thousands of node operators to upgrade in advance of a given block number.
11: Polkadot ecosystem
Centrifuge is part of the Polkadot ecosystem, a unique feature of which is the parachains on the Polkadot Chain.
The parachain is an application-specific, highly customized Layer-1 developed with Polkadot’s blockchain development framework Substrate. It has its own economy, token, governance, and users like legacy Layer-1s. However, unlike legacy Layer-1s, a parachain is not siloed. Instead, it is connected to the Relay Chain. The Relay Chain is the nucleus of Polkadot. It is the Layer-0 base chain housing all validators and responsible for securing, governing, and connecting the parachains.
The next step is to launch the first NFT pool on our canary network, Altair, to test our infrastructure, and then follow up with the first pool on Centrifuge Chain. We are continuously building and super happy to have a community that supports us along the way. If you’re interested in launching a pool on Centrifuge you’ll need to go through the Pool Onboarding Proposal (POP) process that is explained here.
Apart from launching pools, there are other ways to contribute. Centrifuge has a large and vibrant ambassador community and is regularly in search of talent to help create tutorials and promote development on the network.
11 Reasons Why Businesses Will Love “Real World Asset Pools on Centrifuge Chain” was originally published in Centrifuge on Medium, where people are continuing the conversation by highlighting and responding to this story.
