Why Originate Real-World Assets on Centrifuge Chain?
Access to financing for any real-world asset today is restricted to a legacy and siloed process that is inaccessible to a majority of businesses. Despite the overwhelming need for a holistic solution, existing applications only target a portion of the problem. Centrifuge provides the first openly accessible, end-to-end solution to enable real-world assets to gain access to financing.
Centrifuge Chain allows businesses to quickly and easily tokenize their assets and seamlessly connects them to the DeFi ecosystem through Tinlake, our securitization protocol — making it the ideal solution to originate real-world assets. The efficiencies that Centrifuge Chain provides over existing applications, coupled with the openly accessible Centrifuge full-stack solution and access to liquidity, create the financial operating system fit for the 21st century.
I. Cent Chain Efficiencies
We built Centrifuge Chain on Parity Substrate to hold the shared truth of off-chain assets. Centrifuge Chain is optimized specifically for the transactions required by our specific use case. This focus allows us to improve upon our current architecture in a few key ways: speed, cost, scalability, and privacy.
Ethereum works well for low volumes of high value transactions. High volumes of privacy-requiring use-cases require a different solution. The average business user, SMBs and large enterprises alike, would be paying many times more using Centrifuge on Ethereum compared to their existing solutions. It wouldn’t be worth it for most businesses to make a switch. But what if we could lower that cost and have high throughput capabilities?
The transactions on the Centrifuge Chain are optimized for the small subset of operations needed by our specific use case. This allows for faster execution of logic and finality of transactions. The optimization of transactions, together with our PoS architecture, is also what brings down the transaction costs dramatically. Centrifuge Chain also implements a state rent model that requires users to pay for continuous availability of their data over long periods of time. This encourages decentralization because less resources are required to run a node.
Building our own chain also allows us to improve upon the user and developer experience for Centrifuge. Our users require privacy, and this is something we can build for directly — targeting the features they need from the start. For developers, we can provide custom APIs and tools that come with the blockchain node itself instead of smart contract APIs which are harder to integrate with.
II. Full-stack solution
Centrifuge provides the entire funnel for any business to access DeFi liquidity using Tinlake, Centrifuge Chain, and the peer-to-peer messaging protocol. The P2P protocol allows users to store and exchange business documents in a private, secure way. As the next layer, we built Centrifuge Chain using Substrate to hold the unalterable, single source of truth of these documents for all parties. Using Centrifuge Chain and dApps built on top, businesses can tokenize documents and use this as collateral to access financing. Tinlake is our securitization protocol for these tokenized assets built on Centrifuge Chain to optimize risk allocation. It connects our users to the DeFi ecosystem and enables borrowing from many other protocols.
III. Global Trade Protocol
We see the Centrifuge Operating System as a system of coordination for global trade: designed to be minimally extractive and provide an incentive to connect profit-driven businesses with their customers. This design is built for scale, and is structured as a trade protocol.
We believe in composability; which is why each piece of Centrifuge is openly accessible and can be used modularly or as a full stack. Any business can use Tinlake to connect to the DeFi ecosystems on other chains — regardless of whether the assets were originated on Centrifuge Chain. We are building Centrifuge Chain to hold the shared truth of off-chain assets, and assets that are originated on Centrifuge Chain can also be moved to other chains. Centrifuge Chain will be bridged to Ethereum from day 1, and we are looking forward to a future of many, connected blockchains.
IV. Access to DeFi
Using DeFi, Centrifuge makes illiquid trade finance assets accessible to a global, decentralized marketplace. Through Centrifuge, borrowers can access liquidity in DeFi, and lenders can browse through a wealth of unique assets to finance. Centrifuge provides the entire funnel for any business to access DeFi liquidity using Tinlake, Centrifuge Chain, and the P2P Protocol. The Centrifuge vision will see a cheaper and more accessible global business network, built on a financial operating system fit for the 21st century.
Want to know more? Follow Centrifuge on Twitter / Read more on Medium / Check out the Website
Further Developer Resources:
Centrifuge Chain on Github
Developer Documentation
Ask questions in the Community Slack
Join the discussion on Discourse
