Short About: Centrifuge & Altair.
What is Centrifuge?
Centrifuge allows companies (and later individuals) to get crowd-sourced DeFi financing by supplying their assets (like invoices, mortgages, bill of ladings, purchase orders, streaming royalties, real estate; more to come) as collateral.
How to participate?
— Invest in pools on Tinlake (guide + choose a pool)
— Originate assets and get financing (get in touch with a team at firstname.lastname@example.org, minimum asset value is $250k right now)
— Become a validator (guide)
Centrifuge Chain is a Proof-of-Stake blockchain built on Substrate that enables users to bring their assets on-chain as non-fungible tokens (NFTs). Bridged to Ethereum from day 1.
How asset data is verified and assets are valuated?
Here’s an example on invoice financing.
Supplier sells goods and makes an invoice to be paid by the buyer. Usually the buyer pays in 60 days, but the supplier wants to shorten that time. One wants to get financing backed by the invoice that will be paid in the future.
Supplier asks asset originator to create a document — a structured set of fields with specific field types representing a financial asset (invoice in our case). Then the document is submitted to Centrifuge P2P Network. In this network asset originator adds collaborators — supplier, buyer and others, such as valuation firm and rating agency. Supplier and buyer have read-only access to fields and they verify data using their Centrifuge ID (cryptographic key). Other collaborators have write access to certain fields to rate asset and provide input such as asset value, its risk score, etc.
After everything is verified, the asset originator mints an NFT. The NFT metadata contains a link back to the on-chain anchor as well as a link to the private document on the p2p layer. The on-chain data is used to identify the document uniquely and allows anyone to verify the NFTs data as well as exchange the full document data privately within the network.
This NFT now can be locked as collateral into Tinlake to access financing.
More on that process and its privacy-enabled features here — in official documentation.
Another example (link)
A company, such as Paper Records, uses the Centrifuge P2P Network to sign and send an invoice to Spotify. Spotify verifies receipt of the document and its correctness with its signature and sends an updated, signed version of the document back to Paper Records. Ethereum is used for the node identities, allowing Paper Records to look up Spotify and for Spotify to verify Paper Records. Paper Records is then able to anchor the document hash with both signatures onto Ethereum. Using these elements Paper Records can now mint an NFT on Ethereum that represents the unpaid invoice — and use this NFT as collateral to access financing. Third parties, from traditional lenders to DeFi lending pools, can verify the value of the NFT against the on-chain anchors and identities, as well as get access granted to the off-chain document whose authenticity can be verified against the on-chain anchor as well.
The Centrifuge token (CFG) powers the Centrifuge Chain. In case you’ve seen Radial token ($RAD) in old posts — $RAD is now $CFG.
The tokenomics as of April 2021 is:
- An additional 3% of CFG tokens are expected to be minted each year as PoS rewards for validators.
- A portion of the transaction fees will be burned at a rate set by on-chain governance
Unlock schedule is based on estimates and anticipated future distribution events and is subject to change.
What is Altair?
Take a look at Altair (AIR) and it’s Kusama crowdloan. Altair is a Centrifuge canary chain, built on Kusama. It will try the newest experimental features — before they go live on Centrifuge Chain. Even once Centrifuge is fully live on Polkadot, Kusama will be used for minting art NFTs, financing undiscovered assets, and whatever else the Kusama community brings to the table.
To distribute the AIR token, the Altair network will take a snapshot of the balances on Centrifuge chain to distribute AIR tokens to CFG token holders, 1 AIR : 1 CFG.
Altair Crowdloan strategy (link)
For every KSM that is contributed to the Altair crowdloan and locked for 48 weeks to secure the Altair parachain slot, 400 AIR will be rewarded. Minimum contribution — 0.1 KSM. Up to a maximum of 80 Million AIR will be distributed to crowdloan participants.
25% of the reward will be unlocked at Altair launch, while the remaining amount will be distributed to crowdloan participants over the length of the parachain slot.
If Altair doesn’t win any slots, your KSM will be returned when the Parachain auction ends — presumably 23 July 2021 (source)
Ways to contribute
- directly through Polkadot.JS portal
- on Altair website
- through OKex exchange
- through Kraken exchange (Rewards are subject to a 10% administrative fee (calculated in the Reward asset) upon receipt)
- Centrifuge Tinlake and Paperchain join forces to accelerate music streaming revenues (Sep 2019, link)
- Lendflo uses Centrifuge to finance SME Invoices (Feb 2020, link)
- First Real World Loan is Financed on Maker (Apr 2021, link)
Bringing RWA to Aave, utilizing wrapped Celo dollar (wCUSD) and the Acala stablecoin (aUSD) in Tinlake pools (Apr 2021, link)P.S.