Defactor x Satoshi Club AMA Recap from 9th of June
Hello, Satoshi clubbers! Another AMA took place in Satoshi Club and we would like to introduce to you the AMA session with our friends from Defactor and our guests were @b1rav @CF_vila. The AMA took place on 9 June.
The AMA session was divided into 3 parts with a total crypto reward pool of 500$
In this AMA Recap, we will try to summarise the most interesting points for you.
Part 1 — introduction and questions from the Telegram community
Gold Rocket | Satoshi Club: Hello, dear Satoshi Club community! We are pleased to announce AMA with Defactor.
Mary | Satoshi Club: Hello Satoshi Club! We are happy to announce our AMA session with Defactor! Welcome to Satoshi Club
Gold Rocket | Satoshi Club: Today our guests are @b1rav @CF_vila!
Ernesto Vila: Thank you Satoshi Club for having us
Bhairav @ Defactor: Hi everybody, thanks for having us!
Gold Rocket | Satoshi Club: Hello and welcome to Satoshi Club, @b1rav @CF_vila!
Mary | Satoshi Club: Welcome here, guys!
Ernesto Vila: Our pleasure!!!
Mary | Satoshi Club: How’s going?
Ernesto Vila: Very good in a beautiful sunny day in Barcelona
Gold Rocket | Satoshi Club: Thanks again for joining. Let’s start!
Introduce yourself, please. How did you get to be involved in crypto & Defactor?
Tell us please about your position Defactor?
Barcelona is one of the most beautiful places on earth
Bhairav @ Defactor: We finally have some sun in London
Ernesto Vila: My Name is Ernesto Vila I am a Co-Founder and CEO of Defactor, Today I am happy to be here my our CTO
my background is in logistics, supply chain and trade finance
About 3 years ago I exited a logistics company I founded back in 1998 to start developing solutions for logistics providers and international trade with the objective to digitize some of those paper intense processes.
Mary | Satoshi Club: Great experience!
Ernesto Vila: Back in 2019 I took a blockchain class at Oxford University that changed everything for me. Since then we have been shifting from traditional business to blockchain solutions.
Gold Rocket | Satoshi Club: Green technologies are close to you.
Ernesto Vila: Towards the end of 2019, during a conference in Vienna we saw a presentation of Maker DAO and their plans to onboard real world assets to the Maker Ecosystem
Mary | Satoshi Club: Wow, you have such courses! Awesome!
Ernesto Vila: From there we got an introduction to Centrifuge who was pioneering real world asset tokenization and we decided to do a pilot together. That was the very beginning of this journey.
Gold Rocket | Satoshi Club: They are cool guys, no wonder you were so inspired.
Ernesto Vila: I will let Bahirav introduce himself as he has the most incredible background
Bhairav @ Defactor: Thanks Ernesto!
As Ernesto says, I’m the CTO for Defactor. I’ve been working in the tech industry for over 20 years now and I first got involved in trade finance / supply chain finance back in 2013 when I was the CTO for a global supply chain finance company
My interest in blockchain technologies started around 2016/7 when we were looking to see how we could use blockchain in financing trade around the globe but those were early days
For the past year I’ve been working with Ernesto on their journey in the DeFi space and this is how we now have Defactor!
Mary | Satoshi Club: Did you find how?
Gold Rocket | Satoshi Club: Guys! You have a great background for starting a business. And ideas.
So… What is the essence of Defactor?
Bhairav @ Defactor: Now we certainly have, back then, things were much more difficult
Ernesto Vila: The essence of Defactor is to bridge Real World companies to tap into DeFi
a lot to talk about that
Gold Rocket | Satoshi Club: Great goals
How long does it take to develop a project? What plans do you have for the future? And what can we expect from Defactor?
Bhairav @ Defactor: We’ve built connectors into DeFi liqudity i.e. Centrifuge and what we will be doing over the next 6 months is building the additional tools and infrastructure to bring on additional asset originators onto the platform, we have a number of asset origination partners that we are working with and what you can expect is that we’ll be starting with invoices and then moving onto loans and eventually real estate
Of course the timeline for the different asset classes is announced on our roadmap
Mary | Satoshi Club: Can you share your roadmap with our community
so, everyone can check it
Bhairav @ Defactor: https://defactor.com/product-roadmap/
Gold Rocket | Satoshi Club: Thanks for great introduction, we will have a question selected for the Part 1. Ready to start?
Ernesto Vila: Yes we are
Bhairav @ Defactor: Yes indeed!
Q1 from Telegram user @pixma00
Defactor is the solution, it is an easy-to-use platform that allows real-world asset originators to seamlessly access DeFi liquidity and provide investors with insight into the underlying assets being funded. It has an easy-to-use application to authenticate and incorporate assets, allowing cryptocurrencies and trust bridges; connection to liquidity groups; protection through insurance; along with strong governance and community support. Are you stipulated to have a global launch? What are the resources that you currently offer? What are the uses of the $ FACTR token? Does this technology also apply to countries that have restrictions? How does Defactor unleash decentralized finance?
Mary | Satoshi Club: Complex question
Bhairav @ Defactor: We’ll be unleashing decentralized finance by giving real world asset originators the means to gain additional lines of funding for their assets. At the moment asset originators are struggling to gain financing and DeFi investors are looking for somewhere more tangible to put their money. Defactor enables both sides to gain what they want
Ernesto Vila: A question of many parts
The primary function of the $FACTOR Token is to distribute value to stakeholders. Fees will be earned in the following ways:
Network / Application Charges
Margin on lending rates
Crypto <> FIAT spread / fees
Secondary Market fees (Early liquidation)
Non Performing Loan Management
A portion of this revenue will be used to buy $FACTR at market to replenish spending allocation buckets eg. Staking Rewards
Mary | Satoshi Club: A lot of ways to earn!
Gold Rocket | Satoshi Club: great benefits
Bhairav @ Defactor: With regards to technology, we’ll be open to asset originators from all countries and a number of the asset origination partners we are working with are funding companies across the globe
Mary | Satoshi Club: Where we can buy $FACTR now?
Ernesto Vila: The $FACTOR Token will also form the basis of the Defactor governance process and provide the ability for stake holders to propose, vote and approve items to move the project forward. One key one will be should defactor.finance open to allow investors participate directly in deals generated by the network.
Mary | Satoshi Club: How ordinary users can participate in Defactor?
Bhairav @ Defactor: Private fundraising is currently underway, we’re planning a public IDO launch towards the end of July
Gold Rocket | Satoshi Club: Wow! Really soon
Mary | Satoshi Club: It’s near
do you already know details?
Ernesto Vila: The users can participate in the Staking Pools
and Governance of the protocol
Mary | Satoshi Club: Gotcha
hope we will be able soon
Gold Rocket | Satoshi Club: Does community activity affect the final product?
Bhairav @ Defactor: Details will be coming soon
The private sale is going well, we have reached our softcap and are motoring towards our hardcap target
Gold Rocket | Satoshi Club: Don’t forget to share with Satoshi Clubbers
Bhairav @ Defactor: We definitely won’t
Gold Rocket | Satoshi Club: Thank you very much for such an extensive answer! ready for the next question?
Ernesto Vila: Yes, the community will be able to vote to accept new asset classes or new asset originators and even different territories
Bhairav @ Defactor: Fire away!
Q2 from Telegram user @Highpee
One of the problem of onboarding asset originators is the difficulty in assessing known and unknown credit risk. To solve this, Defactor will introduce a Credit Assessment Risk Score to determine the level of funding available against an asset. Can you explain the differences between the Supplier Concentration limit and Debtor Consensus limit and how they interplay to arrive at a credit rating that is indicative of the funding risk of an asset? What invoice size limits are considered before the protocol will release the collateral NFTs to the pool for funding? In what way will you monitor the funding history to be sure that funding is in tandem with an asset pool credit rating?
Bhairav @ Defactor: So it is important to split out a couple of things here
For an individual asset there will be credit risk analysis performed — the asset originators themselves will have their own risk scores (those that are already providing funding) and Defactor will also perform risk analysis
For limits such as supplier concentration and debtor concentration, they will be set by the funding pools themselves and Defactor will enforce those rules. Invoice size limits will depend on the pool, but generally there would need to be some meaningful yield generated on an asset in order for it to go through the process
Mary | Satoshi Club: This pools will be on Defactor platform?
Bhairav @ Defactor: Defactor will also be doing due diligence on the asset originators themselves and their practices, finally as we will be tokenizing the assets and regulating the flow to the pools, we’ll be keeping a track of the funding history to ensure that any limits set, aren’t broken
Bhairav @ Defactor: Initially we’ll be using pools made available via Centrifuge
Mary | Satoshi Club: Gotcha!
So how will the process go? Starting with the infusion of funds and ending with their withdrawal?
Bhairav @ Defactor: Ernesto will take this one
Ernesto Vila: Right now we are connected to Centrifuge, so once an asset has passed the risk assessment is then minted and the values of it made into an NFT, this NFT is the collateral place on the liquidity pool to obtain DAI and finance the transaction
In the case of Trade Finance we are also taking the physicals underlaying goods been transported as collateral for the transaction
Mary | Satoshi Club: Nice system! It seems simple and secure
Thank you for your answers, guys! Are you ready for the next question?
Ernesto Vila: Yes we are!!!
Bhairav @ Defactor: Yes!
Q3 from Telegram user @Asela1112
$FACTR will affect directly in the sustainability of the network and community due to the native token of Defactor platform. What are the privileges that can be aquired not only for $FACTR holders, but also for the Defactor platform by using the $FACTR as native token? I heard about voting system in your platform. So what kind of oprations, Can $FACTR holders vote? What about the whales of $FACTR? Will there be not any special offers for them in Defactor Platform?
Bhairav @ Defactor: The kinds of operations we are looking at making part of the voting system are the onboarding of new asset originators and entering into new territories
As mentioned the token will unlock access to the tools and services on the platform but it will also be used to incentivise asset originators
Gold Rocket | Satoshi Club: Which feature is your greatest pride?
Bhairav @ Defactor: A difficult one to answer, we’re proud of everything — but what I would say is that as we have seen first hand what it takes for asset originators to integrate into DeFi liquidity and by bringing down the barriers we can really make it easier for companies to obtain funding
Gold Rocket | Satoshi Club: Thanks for your answers! Ready to proceed to the next question?
Bhairav @ Defactor: What is even more exciting is
Q4 from Telegram User @kimterbear
Defactor is initially released in Ethereum Network due to the fact that its liquidity providers are in the ssid network as well (Centrifuge and Maker) However, with Ethereum issues regarding its high gas fees, people are less likely to adopt in this network despite its superiority as a blockchain. Do you also have plans for cross chain to incline with mass adoption? What steps do you plan to do in order to convince people that Ethereum or not, $FACTR will be worthy to buy?
Bhairav @ Defactor: Yes we do, as mentioned we are currently plugged into Centrifuge but they are also building out on Polkadot and we will follow and as liquidity pools that we are able to tap into emerge on other chains, we will be building bridges into them
Mary | Satoshi Club: You will have your own bridge, right?
Bhairav @ Defactor: This is the plan at present
Mary | Satoshi Club: And, as i understand you will follow Centrifuge? If they will add more blockchains you will do the same?
Gold Rocket | Satoshi Club: Whoever owns cross chain bridges today owns the crypto world
Bhairav @ Defactor: As one of our partners we will certainly work with them to ensure we can access funding for our asset originators, as other pools become available to us, we will also be working with them
Mary | Satoshi Club: Thanks! That’s clear! Next question is also connected with your partnerships
are you ready for it?
Bhairav @ Defactor: Go for it!
Q5 from Telegram User @NataliyaKil
ConsolFreight and Centrifuge were the first strategic partners and early adopters of the Defactor platform. You are currently also partnering with LendWise, Accelerated Payments, iHuddle and Black Manta, which add more value to the Defactor ecosystem. What development prospects do I have for Defactor thanks to these alliances, and what does the Defactor platform give to its partners that other similar platforms do not have? What makes you different from others? What other collaborations are expected in the near future?
Bhairav @ Defactor: That’s a great question
There are a few angles to this question so first
Accelerated Payments, Lendwise, iHuddle all give us the opportunity to scale the platform quickly but in a controlled manner. Each of those companies is looking for additional liquidity to fund deals they already have going through their platforms
Defactor gives them the ability to grow not in just funding volumes but to open up new territories
For example, Accelerated Payments can expand the dollar financing they already provide in Africa
Lendwise is able to fund more student loans
We will also be partnering with non-asset originating partners so expect some more collaborations announced with more operational and strategic partners
Mary | Satoshi Club: Great opportunities for both of projects!
Ernesto Vila: In the case of Consol Freight we will allow them to expand their market reach by implementing the tools for them to onboard more logistics providers to their platform and expand beyond the 49 countries they have presence on
Mary | Satoshi Club: What about your future partnerships? Which direction you’re looking at?
Bhairav @ Defactor: They will be more operational and strategic i.e. insurance is on our radar and we are already talking with potential partner around how we can bring this to the platform
Ernesto Vila: We are currently in conversation with well established factors that are looking to expand into US$ denominated jurisdictions
Gold Rocket | Satoshi Club: Thanks for the great answers! Ready for the final question of this part of the AMA?
Bhairav @ Defactor: Definitely!
Ernesto Vila: Yes we are!!
Q6 from Telegram User @Jonahapagu
Going through some of the components of Defactor, i came across the “Deal Liquidator” which is said to be a secondary market where investors will be able to release liquidity by trading their investments, and that this will also be used to liquidate any deals at risk of non-performance through a partner network… How does this secondary market work, againt what will investors be trading their investments for in the Deal liquidator, What partner networks will Defactor be using for the liquidation of deals, and how will Defactor liquidate deals considered to be at risk of non-performance usign the deal liquidator and a partner network…
Bhairav @ Defactor: That’s another great question
The idea behind the secondary market is for us to allow investors to sell a whole or part of their investment if they have the need to liquidate, this is further down in our roadmap at present as we are talking to a potential partner regarding this
For non-performing assets we again are working with partners to either collect on the debt owed or sell the for any non-performing assets. It should be noted that the asset originators we are onboarding currently, do have their own insurance and collections process to mitigate the risks for investors
Gold Rocket | Satoshi Club: Sounds good
Thank you very much for your answers! it was dynamic and very interesting!
Please share useful links with Satoshi Clubbers before opening the chat
Ernesto Vila: Please follow us at https://t.me/defactor_official
Bhairav @ Defactor: Our website where you can find a link to the whitepaper: https://defactor.com/
Mary | Satoshi Club: And i know, that our community is excited for the next part of our AMA! Live part!
Part 2 — live questions from the Telegram community
Q1 from telegram username @mucana
Defactor’s target audience is businesses. How will the solution be for countries where English is not well understood? Do you have local community initiatives?
Ernesto Vila: Thank you @mucana for the question, communities are very important to the success of Defator, as mentioned before our of our initial assets originators is on International Trade Finance, by definition the product is very international where most goods are manufactured in China and shipped to the Americas and in both sides of that equation they need financing so we are translating elements of the UX in mandarin and Spanish witch makes up for the biggest % of languages spoken, and we expect to rech different makets with the help of our community
Q2 from telegram username @rockmorti
Will De Factor add to its protocol the opportunity to be governed by its own community, whether through DAO or other systems?
Ernesto Vila: Yes, through a DAO
Q3 from telegram username @messilolz
many projects gets failure due to team mistakes and abandon later . How big is you team and how well experienced team you are?
Bhairav @ Defactor: Thanks for the question @messilolz
The core team at Defactor is very experienced, we’ve built and scaled companies all over the globe and are supported by some very experienced advisors and blockchain professionals. I think the key for us is that we have been actively involved in the finance / trade finance space for a number of years and have seen first hand how asset originators work and the struggles they face obtaining finance.
We also understand the challenges with regards to DeFi and connecting into liquidity pools. All of this experience helps us build the right tools to unlock DeFi for real world asset originators and we are not ones to run from our mistakes
Q4 from telegram username @KYCDONA
Do you have a Token Burning plan to increase Token value and attract Investors to invest?
Ernesto Vila: We wont have a token burn, instead we plan to deploy capital from the treasury to buy back $FACTOR tokens to be place on the staking rewards and create a circular economy where the value of the token always increase as more asset originator need them to access the platform
Q5 from telegram username @andrey_seleznov
I’m very interested to learn more details about Defactor Crypto <> Fiat Bridging. Can you share the specifics on how it will work? Will it be accessible globally across the different countries? What fiat currencies will it support and what payment methods will be available to users? Thank you!
Bhairav @ Defactor: Hi @andrey_seleznov, thanks for the question
DeFi and crypto bridging is obviously a crucial part of this and again we are talking with a number of partners in this space to ensure that the conversion of stable coin to fiat is smooth, cost effective and most importantly — speedy. The asset originators we are partnering with require EUR, USD and GBP, however the initial focus will be on USD as that is what most international trade is funded in
Q6 from telegram username @Arisabela
I see Defactor is focusing its attention to Real World Asset Originators that are onboarded to the DeFi ecosystem, can you explain what are these actors and why are you focusing your solutions on integrating them to the decentralized finances?
Ernesto Vila: Indeed, we are focusing in the RWAO as there is a real need for financing in the “real world”. For example, Trade Finance a critical financial service for the international commerce is at its lowest due to Covid-19 and other issues in the market. In 2020, the service gap was $1.5T, the expectation is that post Covid-19 the service gap will be between $2T and $5T. This situation is a perfect opportunity to position DeFi as a true competitor in the financial sector and service the need for liquidity of not only traditional players in the financial market, but also allows for new business opportunities based on this new digital economy. Furthermore, DeFi protocols are now starting to onboard RWAs to their portfolios; an example of that is MakerDAO, which is currently onboarding RWAOs to stabilize the asset prices locked in their protocol.
Considering these factors, it is clear that scalability for RWAs in DeFi is required.
Q7 from telegram username @Alex_dro_Alax
What are the ways that generates income/revenue to maintain your project and what is its revenue model?also How can it make benefit win-win to both invester and your project ?
Bhairav @ Defactor: Thanks for the question @Alex_dro_Alax. Revenue from the platform will be generated by fees for access to the liquidity poolsr as well as revenue generated from the yield produced by the underlying assets. As part of our roadmap we will be offering more services (such as insurance as I mentioned) which will also be revenue generating
Q 8 from telegram username @alptrader
Are your all team members in Barcelona and London? Do you have any other places where your other members are?
Ernesto Vila: Our team is very diverse been the majority of them in Ireland, but we have members in the US, UK, Spain, Hong Kong and India
Q9 from telegram username @MaxiVV
When you say that DEFACTOR is the bridge between traditional and decentralised finance. What are those features are you merging of both? People are here in the crypto world because is tired about the traditional finance. How do you make an innovative idea to attract users to this kind of bridge? and how this idea helping to improve the problems as scarcity of expertise, highly complex, high cost of scaling and risks unknown?
Bhairav @ Defactor: Thanks for the question @MaxiVV
What we mean by acting as the bridge is that we will be the connecting platform between traditional finance and DeFi. Large asset originators like the partners we have, struggle to obtain funding through traditional methods because banks aren’t lending at the scale that is needed and haven’t been doing so for a while. If you look at certain geographies banks have been pulling out of certain activities like trade finance and this is a big problem for SMEs that are looking to grow
DeFi lenders may well be tired of traditional lending but yield farming between different crypto currencies is also unsustainable. We provide real world assets that DeFi investors can put money into and importantly they can see that their money is being used to fund real things and have a real impact to businesses across the globe
We are making it easier for companies to get access to the liquidity — they won’t need their own tech team or to invest time and resources into building their own connectors
Q10 from telegram username @vedamatrix
I didn’t see any NFT features on the project what do you think about NFT’s and any plans for it?
Bhairav @ Defactor: Hi @vedamatrix, NFTs are an integral part of Defactor. We are using NFTs to digitise assets and use this digital representation of the assets as collateral. From that point we are surrendering the NFT and obtaining funds for the Liquidity Providers
Part 3 — Quiz Results
As usual, for the third part, Satoshi Club Team asked the chat 4 questions about the crypto project. A link to a Quiz form was sent into the chat.
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