Introducing Centaur — The Future of Decentralised Finance
Currently, decentralised finance (DeFi) only works for niche use cases due to their technical barriers to entry, few regulatory guarantees, and lack of reliable credit systems for unsecured products. This limited scope of DeFi excludes most customers of traditional finance from the accessibility and transparency of blockchain technology.
We believe that the industry’s focus on purely decentralised solutions is what has led to missed opportunities and, in the worst cases, created unnecessary roadblocks. With that in mind, we are introducing Centaur, a set of decentralised finance solutions involving a hybrid approach to decision-making, risk-taking, and record-keeping. One where the efficiencies of centralised systems can actually foster the evolution of decentralised finance!
Centaur operates similarly to well-known, brick and mortar institutions of decentralised finance, namely cooperative banks. A network of lenders provide, own, and control a liquidity pool that is made available to qualified borrowers. In this case, however, blockchain technology offers a definite advantage in terms of overall scalability and the transparency of real-time financial information. More so, the same liquidity pool can be extended beyond P2P finance to use cases such as cross-chain transactions and future decentralised applications. Centaur also protects the anonymity of members of the liquidity pool with the implementation of an advanced cryptography technique known as zero-knowledge proofs.
Different from radically decentralised models, our platform is partnering up with traditional financial players so that stakeholders can make appropriate decisions based on borrower financial history. This places Centaur in a category of its own, since having credit score data means we can offer undersecured, or even unsecured financial products.
The introduction of uncollateralized loans opens decentralised finance to a wider net of potential borrowers that would otherwise resort to traditional finance. It also creates opportunities for innovation in credit-based financial solutions that could not be built on current services which usually require up to 150% collateralization.
By maintaining other aspects of centralized systems, we also provide an improvement in terms of risk-taking. Compliance with KYC regulations and the requirement of borrower identity gives the network access to traditional judicial processes in the event of defaults, breaches, or hacks.
In terms of record-keeping, the Centaur Chain functions as a settlement layer utilizing Tendermint Core to guarantee a high throughput of transactions in order to prevent the kind of impasse that recently affected services built strictly on the Ethereum blockchain.
Likewise, cross-chain interoperability means that users can access solutions on other popular blockchains and are not restricted to any one particular ecosystem. These features guarantee that Centaur is more scalable than current decentralised alternatives, yet it avoids the single point-of-failure approach that characterizes traditional finance.
Altogether, a semi-decentralised approach creates an ecosystem of scalable services for wallet-owners that goes beyond a lending platform for unsecured loans. These include the development of crypto index funds, as well as domestic and cross border transfers. Holders of our platform’s native CNTR token can use it as a medium-of-transfer, voting right, or fee payment for any of these services across multiple blockchains.
Centaur is a single, comprehensive interface for decentralised finance that includes crypto-enthusiasts and everyday consumers alike. Its services could be a step forward in making new financial instruments available to small businesses and previously unbanked low-income communities.
To learn more about the platform, please visit our website and join us on Telegram or Twitter.