8 Highlights From “Stablecoins Are Killing It” Episode #7 Featuring Centrifuge, Meter, & BitMinutes
The first 36 minutes of Episode #7 featured our panelists giving overviews of their projects and sharing some macro stablecoin thoughts. The final 20 minutes were spent on Q&A with the audience. You can view the entire episode below:
Or you can read my 10 highlights below: :
1. Centrifuge Bridges Real World Assets to DeFi
Centrifuge works with asset originators to take their assets (e.g. invoices), put them in to pools, and get them tokenized and financed by DeFi:
Centrifuge works with different types of asset originators including non-bank lenders, banks, and embedded software companies (e.g. Salesforce, Square..) that may lend to their partners or customers. They tokenize the assets, put them in a pool, and then leverage DeFi (e.g. Maker) to get a loan, using the tokenized pool of assets as colalteral.
2. Centrifuge, Which Launched Just Last Month, Has Already Created Two Pools Of Assets, And Paid Back The First
The first pool created was a batch of 30-day invoices from freight forwarder Consolfreight. Centrifuge raised the money , deployed it, and paid it back ($280,930.38), at an APR (annual percentage rate) of 10.5%. The second pool, from Paperchain, is using streaming royalties owed from Spotify owed as collateral. The third pool will be Consolftreight Serties 2, which is a $350,000 pool of invoices.
3. Centrifuge’s Consolfreight & Paperchain Are Two Of Just 6 Assets Recently Approved By The Maker Community For Further Diligence
Given the community support for Paperchain and Centrifuge, Maker teams with domain expertise are now in the process of doing due diligence on the assets to ensure they’re appropriate to be used as collateral for minting DAI.
4. Centrifuge Can Divide The Pool Of Assets In To Different Tranches To Optimize The Size Of The Loan & The Interest Rate Paid
Given the volatility of ETH, users need to lock $150 worth of ETH for every $100 of DAI they mint. In the example above, Centrifuge can create a junior tranche of the pool, that would take the first losses. As a result, Maker may only require the senior tranche to be over-collateralized by 10%, and pay 6% interest, to mint DAI.
5. Meter Is Based On the Inflation Adjusted Cost of Kilowatt Hour Of Electricity
Per the chart above, the inflation adjusted global cost of a killowatt of electricity has been far more stable than any currency. The size of the block reward is based on the hashing needed to create the coins.
6. Meter Has A 2 Token Economy, One Reflecting The Cost of Production & The Second Token Is For Record Keeping Consensus
First token is a currency token as PoW mining, equilibrium price will be marginally lower than a dollar. Miners profit seeking behavior will mine when price is higher. Second token is PoS for record keeping consensus. This mergers the benefits of both worlds.
Meter is launching Mainnet shortly to test the design in the real world. Creating liquidity via exchanges is one of the major challenges.
7. BitMinutes Creates Electronic Versions Of Country Specific Fiat Backed By Pre-Paid Cellular Minutes In That Country
So for example, in Nigeria, they create a BitNaira. In Guatemala they create a BitQuetzal. They leverage agents to reach the customers. InNigeria they have 1,300 agents and 7,000 customers. In addition to stable currency, BitMintues enables the purchase of Bitcoin as well.
8. Banks Historically Dominated Trade Finance, FinTech Companies Have Started To Open Up The Market
Fintech companies like Taulia and FundBox have been chipping away at the domination by banks in trade finance. Centrifuge is poised to leverage the progress already made to further accelerate the growth of trade finance alternatives.
RSVP on Zoom for “Stablecoins Are Killing It” Episode #8 on Thrusday, July 9th from 1pm-2pm EST.
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