23 Nov 202115:43
Credefi AMA Recap
Myko (CryptoDiffer)Hello, everyone!😁
We are glad to meet here:
Ivo Grigorov, CEO of Credefi @ivogrigorov
Ivo GrigorovHello everyone! Its a pleasure to meet you all 🙂
Myko (CryptoDiffer)Welcome Ivo, its a pleasure for us to host you here
let's start with some introductory questions
Q1: Can you introduce yourself to our community?
Ivo GrigorovMy name is Ivo Grigorov and I am the CEO of Credefi. Credefi’s team has 40+ years of experience in finance – from private equity funds to commercial and central banks, and we are crypto believers as well, being in the space since 2016. We have been working in leading roles for several commercial banks, private equity funds, asset management institutions and the Central Bank of Bulgaria. In our experience we have seen time and time again the great deficiencies of traditional finance, while witnessing the tremendous growth of DeFi and the opportunities it opens and that’s how the vision of Credefi was born.
We believe DeFi is the future of banking and are quite frustrated that so far it has very little connection with and impact on the real economy, it’s a closed universe. We aim to change that and open a brand-new niche in DeFi by enabling stablecoins to flow to real businesses and earn a fixed and non-crypto-related yield. At the same time we aim to become a gateway to DeFi for SMEs and render obsolete the outdated, bureaucratic and overregulated banking services SMEs now have to cope with, replacing them with quick, flexible and user-friendly funding solution.
Myko (CryptoDiffer)okie, thanks
Q2: Can you introduce Credefi to us?
Ivo GrigorovCredefi is a first mover in the DeFi space connecting crypto lenders & SME borrowers from the real economy. Our platform enables decentralized and secured lending to portfolios of businesses, protecting lenders while providing them fixed APY that is uncorrelated with crypto markets’ volatility.
Credefi is resolving some of the key challenges in DeFi and TradFi:
-On the DeFi side, DeFi yields are inconsistent, fragile, and evaporate in bear markets and the aftermath of DeFi Winter and the market crash in May ’21 are a clear proof of that. We see that speculative borrowers cannot satisfy DeFi lending supply.
-On the TradFi side, small and medium enterprises are historically underserved by traditional banks and are borrowing at consistently high interest. There are not enough lenders to satisfy SME borrowing demand, pushing SMEs to alternative lending solutions such as peer-to-peer and crowdfunding which are billion-dollar industries in the US and EU.
Q3: Let`s now talk about the milestones you have achieved so far and about your upcoming plans?
Ivo Grigorov2021 has been an amazing year for us – we went from founding Credefi and beginning to execute on our idea to actually launching our platform – planned for December – and also launching our Credi token and growing our Credefi community, or as we love to call it – our CREDI Army. Bridging the traditional world of small and medium businesses with DeFi and connecting those universes seamlessly is a tremendous challenge that we are tackling head on and for us the biggest achievement will be the actual launch of our platform and seeing stablecoins starting to flow to real businesses. So far we have executed near perfect on our roadmap and have achieved amazing traction with both crypto and real-world partners (Lithium Finance and Experian are just two examples) and we are absolutely thrilled to see our “baby” born and starting to revolutionize DeFi and TradFi.
More specifically, we have completed the alpha version of our platform which is now being tested internally and we plan to start a public testnet in November (open to select number of early project supporters – keep your eyes open for that one because let’s just say we appreciate those who have been with us from the very early stages 😊
Also we have recently concluded our partnership with Experian, which is a first for the blockchain world. Experian is one of the Big Three credit scoring agencies in the world and their tremendous experience will help calibrate our risk-assessment models, allowing us to score borrowers precisely and not demand more (or less) collateral than is really needed, reducing friction in the lending process. We will participate in Experian Innovation Week in November as one of the keynote speakers and we are really excited to be an ambassador for DeFi in traditional finance circles, as well as the other way around.
Previously we have concluded partnerships with Polygon and two oracles - Lithium Finance and SupraOracles, who will help us get on-chain as much data from the real word as possible.
Our roadmap features the IDO with Cardstarter on November 8, immediately followed by exchange listings – we will have important announcements on this end very soon. Next, we will run our public testnet and bug bounty program and we aim to do the guarded launch of Stage I of our platform (portfolio lending) in December. In 2022 we will roll out Stage II and Stage III of the platform – peer-to-peer lending and trade finance services, while also expanding beyond the European Union to markets in East Asia, Latin America and the CIS region. We also plan to be cross-chain interoperable, so integrations with leading blockchains like Cardano and Solana are in the works.
This is just part of what we are planning for 2022, we don’t want to spoil the surprises we have prepared for you as Credefi really develops and expands a new segment in DeFi 😊
that's a lot
Q4: How is the APY system at Credefi, and what are the advantages of lenders here? What is the security system at Credefi?
Ivo GrigorovThats a great question!
In Stage I of the platform we will have four portfolios of loans, ranging from low-risk with ~10% APY to high-risk with ~40% APY. In Stage II – peer-to-peer lending, lenders and borrowers will be free to set whatever loan terms they agree upon, but they will be able to see the credit scoring of the borrower performed by Credefi as a reference.
The key advantages to lenders are:
- fixed yields thar are very weakly correlated to the crypto market and will not evaporate in bear markets, providing safe haven to stablecoin lenders.
- full transparency regarding portfolios, loans and borrowers – our users will be able to see detailed information about each project in each portfolio, in contrast to current DeFi solutions which are “black boxes” in reality.
- our three-layer protection mechanism, providing maximum security to our lenders, based on our
o 1) in-house credit scoring backed by Experian;
o 2) crypto and real-world collateral; and
o 3) our Security Module (Module X)
- professional credit scoring of each borrower, validated by Experian and available for free to our users.
talking about some issues
Q5: How do you plan to resolve the overcollateralization but yet mitigate risks for the project?
Ivo GrigorovWe will completely eliminate the overcollateralization problem as we will accept real-world assets as collateral and will have professional credit scoring of each borrower.
By accepting collaterals of real-world assets whose value is not as volatile as crypto, we will reduce the Loan-to-Value ratio and require from each borrower only as much collateral as is needed to secure the loan. Using real-world assets as collateral in a simple and user-friendly manner through our partner financial institution is a game-changer because it allows real businesses to tap into DeFI – as you can imagine, small and medium companies don’t hold crypto on their balance sheets so they are unable to participate in DeFi in its current state. At the same time, a professional credit scoring will allow us to properly estimate the Loan-to-Value ratio for each borrower based on their specific risks.
Myko (CryptoDiffer)Got you
Q6: Do you have any plan of starting staking programme?
Ivo GrigorovYes definitely!
Our tokenomics is designed and inspired by the latest trends and developments in the space. We have implemented a 2-token economy model, which secures and stabilizes the platform, while increasing APY for our stakers and token holders. Through staking our native token CREDI in our ModuleX, you will be able to receive higher APY as well as mint our governance token xCREDI. Additionally, we have implemented a buyback and burn mechanism of xCREDI, in order to return part of the revenue generated by the protocol.
Users will be able to stake CREDI tokens in our ModuleX and mint our governance token xCREDI right after the launch. Early stakers will enjoy the best conversion rate between CREDI and xCREDI, as well as increased APY and additional rewards as soon as the platform starts operations.
now the final one
Q7: What are the Business Objectives, Market and Target audience of Credefi ?
Ivo GrigorovAs we mentioned, our goal is to connect DeFi to real businesses that need funding and provide stable yields to DeFi lenders and a full suite of financial services to small and medium business borrowers.
Our utmost priority is the security of our lenders and that’s why we will implement a three-layer protection mechanism, consisting of:
- in-house proprietary credit scoring based on our vast financial expertise and validated by Experian – one of the Big Three credit scoring agencies in the world. Actually we are the very first blockchain project to partner with this financial giant.
- accepting both crypto and real-world assets as collateral. We are partnering with a EU-licensed financial institution that will manage the collateral on the lenders’ behalf and liquidate it in case of default.
- our very own Security Module (Module X) which will provide additional yield to stakers while bridging the time gap between a borrower stopping payments and the moment their collateral is liquidated and returned to lenders.
Market and target audience: we will start with a guarded launch of our platform, accepting borrowers only from the European Union. This is our home jurisdiction where we are intimately familiar with regulations and also can operate with real-world collateral as mentioned above. However, the platform will be open to lenders from all non-blacklisted countries from Day 1. Next we will expand to markets in East Asia where we have a very strong local partner (to be announced on a later date), Latin America and the CIS region.
We have recently passed a smart contract audit with Armors Lab - a leading provider of smart contract audit services with a very good reputation. We will be publishing the report soon - please follow our official channels for the latest updates. Just to share some insight... the you will be extremely satisfied with the result!
Cryptodiffer CommunityIs your platform suitable for crypto beginners? Or does it only limited for professional users ?
Ivo GrigorovWe have designed the platform to be suitable for both begginers and more advanced users. We would like to eventually become a gateway for SMEs for crypto lending, so we had to have in mind users, which do not have previous experience in the crypto sphere.
Cryptodiffer CommunityHi! 💹
The APY for the stable coins is starting from 10%! This is quite beneficial for the stable coins! How can CreDeFi provide this? Is this high APY sustainable? Please also tell about the revenue model of CreDeFi
Ivo GrigorovOur APYs are based on real-life SME lending in different business situations - need of more working capital, launching a new product line, building a new real estate development, requiring bridge financing for a short period of time before a cash inflow, etc. Bridge funding for example often comes at high interest rates which SMEs are happy to pay because of the short period of time of these loans - the percentage interest rate may be high, but the total amount of interest paid is low.
Lenders always face the risk of loan default - it’s not a risk-free investment and of course the higher the loan APY, the higher the risk. However, we have structured a three-layer protection mechanism to protect our lenders as much as possible:
Layer 1 - all borrowers and loan applications are professionally assessed (with validation by Experian) to come up with the “right” amount of interest and collateral needed.
Layer 2 - all loans on our platform will be collateralized, using both crypto and real-world assets as collateral.
Layer 3 - our Security Module that will bridge the time gap between a borrower stopping payment and their collateral being liquidated and funds returned to lenders.
Cryptodiffer CommunityI saw that you have a financial partnership accredited by the EU. How does this partnership help Credefi go further in credit? How does it contribute to business borrowers?
Ivo GrigorovOur partnership is a strategic one in terms of collateral management and recuperation of funds when it comes to non-performing loans. This greatly optimizes our business operations and allows to accept real-world collateral such as pledges on real estate, receivables etc. This model of recuperation of funds is battle tested throughout the credit industry and it provides additional security to our liquidity providers.
Cryptodiffer Community🅾️ I understand that your main focus is SMEs but Apart of them are you open to explore other alternatives with individuals or large enterprises?
Ivo GrigorovCore to our business model and believes is the security of lenders. This is one of the reasons why we are starting with SME financing. Our risk assessment models are designed and calibrated to have a high predictability of wether an SME will be able to repay the loan or not. In order to include individuals and larger enterprises to develop models for these segments as well and we are not excluding, but if it comes it would be further down the roadmap. For us the SME segment is probably the most underfinanced one and we would like to solve this inefficiency in the market.
Cryptodiffer Community✅Considering your association with real world finance or TraFi, can you explain us how many types of real assets are your able to support? Only with FIAT or physical assets can be used as well?
Ivo GrigorovWe are supporting not only FIAT but physical assets as well. During our guarded launch we will accept collaterals in the form of pledges on RRE, CRE, receivables, inventory, machinery etc.
Cryptodiffer CommunityWhat is your team's expertise in management, finance and technical areas? How experienced is your team in producing solutions against risks in the credit market?
Ivo GrigorovPersonally, I have been part of the credit risk methodology and capital adequacy department of one of the biggest banks in the region with more than $5 billion under management. Our core team has more than 40 years of experience within the finance industry overall. Furthermore we are partnering with Experian, which is one of the Top 3 credit scoring and data analytics companies worldwide, which provides scoring for more than a billion customers. This partnership is official and actually we are taking part in Experian Innovation Week event in November.
Cryptodiffer CommunityIn the world cryptocurrency competition, functions are crucial to attracting investors and communities. Can you provide a series of killer functions that shock your competitors?
Ivo GrigorovCredefi is a unique protocol in many ways. We are pioneers in connecting DeFi with real-world businesses - a challenging task that very few projects have set to achieve so far. What makes us confident we’ll be successful in our mission is the lending mechanism we have developed, which makes our platform secure for lenders and easy-to-use and accessible for SMEs.
More specifically the acceptance of real-world collateral, its proper evaluation and administration in a user-friendly manner for SMEs allow those companies to easily join our platform and enter the DeFi world without fear. On the other hand, for lenders we provide a unique diversification opportunity - earning fixed yields not correlated to the crypto market volatility.
Cryptodiffer CommunityCan you share to us your tokenomics? How much is the total and circulation supply of your tokens? Will there be buy back system or token burning in the future?
Ivo GrigorovOur CREDI total supply is 1B, however more information on the tokenomics will be shared with our community in due time. Our tokenomics is designed and inspired by the latest trends and developments in the space. We have implemented a 2-token economy model, which secures and stabilizes the platform, while increasing APY for our stakers and token holders. Through staking our native token CREDI in our ModuleX, you will be able to receive higher APY as well as mint our governance token xCREDI. Additionally, we have implemented a buyback and burn mechanism of xCREDI, in order to return part of the revenue generated by the protocol.
Thank you all for the great questions and sorry for not having sufficient time to answer all of them. Let's continue the discussion in https://t.me/credefi where you'll also find information about our community calls. Join us to continue the party 🙂.