Untangled in 2022
In praise of stability
As we write this, the global stock market has its worst week since 2020. Crypto market cap has halved (50%) from $3 trillion in November to around $1.5 trillion today. Cryptos are highly volatile and correlated within themselves and with the stock market. In fact, crypto suffers from the same problem of the stock market — pro-cyclicality. A lot of decentralised finance (DeFi) is over-collateralized lending. A decline of collateral prices could trigger an automatic liquidation which dampens the prices further in a downward spiral.
Times like these remind us of the virtue of stability…
Untangled bridges real world assets like green loans, trade finance and SME financing to decentralised capital pools.
We expand the collateral universe of DeFi lending. Our collaterals are stable and uncorrelated to the rest of crypto. More importantly, we can bring DeFi innovations to benefit the real economy, keeping people employed in SMEs and help mitigate the impact of climate change. We combine blockchain’s power of coordination and capital allocation with the real world’s stability and meaning.
We have a pipeline of nearly $200m for 2022. To give you a flavour of what going on across different asset classes:
Green assets: Transitioning to a greener world — financing smaller issuers with proven renewable energy technology
- Renewable energy producer from tidal wave: a winner of numerous awards for its innovative technology, this company is looking to refinance its construction loan. Yield will be around 6–7% APY
Trade finance: Lifeblood of global trade. A lot of SMEs depends on trade finance for working capital requirements (e.g. pay their employees)
- FCA regulated trade financier providing working capital finance to suppliers globally, many of them are SMEs. Yield will be around 6–9% APY.
SME loans: High yield, uncollateralized loans to smaller companies
- UK based, FCA regulated SME lender offering flexible financing. As the economy continues to recover, the lender has seen a great demand for its services. Yields are 10%+ APY
Developing a liquidity base
We develop Untangled so that any investors, especially those in developed markets can access credit opportunities from anywhere in the world, especially emerging markets. Our liquidity providers are both institutions and qualified individuals.
To bootstrap liquidity, we have done a lot of work connecting our platform to DeFi lending protocols and other institutional DeFi liquidity providers. This is to ensure that our asset originators can refinance their collaterals. Individual investors can also leverage the due diligence done by institutional investors for each opportunity.
We are inviting a selected group of investors to a dataroom opened for each of the above opportunities. If you are interested in an early access to any of these, please let us know at email@example.com