Acala + Credora Launch Transparent and Compliant Secured Lending Vehicles for Bitcoin
Hybrid CeFi + DeFi Solution Unlocks Value for Digital Assets Investors
LISBON, Portugal — September 28, 2023 — Acala, the liquidity layer for Web3 finance, joins forces with Credora, a privacy-preserving Credit Intelligence Platform, to launch the first of its Secured Lending Vehicles: BTC Yields through Polkadot Staking. The inaugural Special Purpose Vehicle (SPV) will leverage Bitcoin (BTC) loans to derive a delta-neutral yield from Polkadot Staking, unlocking yields for the Bitcoin market currently valued at more than $500 billion USD. Partnering with crypto-native market maker Portofino Technologies for its execution and distribution expertise, the SPVs are projected to return an annual percentage yield of 7–10% for secured loans.
“In the current financial landscape, challenges abound for those seeking to earn a worthwhile yield on bitcoin, and digital asset investors want to know their funds are safe,” said Bette Chen, Co-Founder, Acala Network. “We’re offering a new HyFi (hybrid finance) solution that combines the best of both worlds — the transparency and efficiency of DeFi with the regulatory compliance and security of CeFi. Credora‘s secured lending opportunities are structured with solid legal and technical protections in place.”
Secured BTC Yields through Polkadot Staking
Credora’s unique infrastructure allows SPVs to borrow BTC, purchase low-risk yielding assets, and use derivatives to maintain directional exposure to BTC. All assets will be segregated and monitored in real-time, enabling lenders to validate the SPV’s activities. The bankruptcy remoteness of the SPV ensures an added layer of security, and all loans are to the senior tranche of the SPV, secured by the assets in the SPV. Yielding assets in the future will include other staking assets, bonds, or real-world assets.
“Post-FTX, the lending market is wary of opaque and risky lending, and is looking for opportunities that give them more insight into the source of the yield and more security embedded into the loan terms,” said Darshan Vaidya, CEO of Credora. “Our technology provides the most in-depth and up-to-date data on any yield opportunity, and offers innovative legal and technical structures that unlock secure and transparent yields for lenders in the space.”
Portofino Technologies is delivering the digital assets liquidity needed to secure the loans.
“We’re working with Acala and Credora to modernize BTC lending, a multi-billion dollar market with the potential to be much bigger. This product provides a new secure avenue for BTC holders to unleash idle BTC and maximize their potential returns,” said Jae Park, Chief Financial Officer of Portofino Technologies.
Transparent and Secure Source of Yield
Using Credora’s platform, the risk of a loan can be legally and technically segregated, ensuring all lenders to the SPV are the only parties to have a claim over the SPV’s assets. The loans will be a part of the senior tranche of the SPV, and receive protection from junior tranche lenders, which will include capital from the trading firm managing the strategy.
As lenders are increasingly seeking transparent and secure sources of yield, staked crypto assets, sovereign, and corporate debt are emerging as preferred avenues for lenders.
About Acala & Acala Liquid Staking
Acala is building the liquidity layer for web3 finance that is captive and sustainable. It aims to provide infrastructures for HyFi (DeFi+CeFi) solutions with crypto and real-world assets. Acala’s liquid staking protocol (LDOT) offers participants enhanced liquidity and capital efficiency without compromising the overall security of the network. LDOT is a decentralized and non-custodial protocol with proven validators such as Coinbase Cloud, suitable for both retail and institutional participants.
For more information, please visit https://acala.network
About Credora
Credora is a credit intelligence platform to help facilitate credit in a more transparent and seamless way, using privacy-preserving technology to validate creditworthiness, without borrowers having to give up sensitive information. The platform has licensed and regulated rails for loan execution, offering an array of secured and unsecured lending opportunities.
For more information, please visit www.credora.io
