CrescoFin hopes to provide crypto users with a risk-free deposit solution through an insurance solution, and is expected to introduce institutional-level users to Aave, for which the company has invested $125 million.
Written by: LeftOfCenter
The two seemingly contradictory concepts of “risk-free” and “DeFi” have found the possibility of integration under the ingenious design of CrescoFin.
With the gradual development and growth of DeFi, more and more assets are locked on the chain, and the demand for liquidity digestion is becoming more and more severe. In addition to the original cryptocurrency companies, we also hope that decentralized finance can be connected with real assets and become the traditional world in the real world. Of businesses and consumers provide value.
CrescoFin, a compliant blockchain company from Switzerland, is trying to provide a DeFi risk-free deposit solution to replace the traditional bank savings business.
The high risk of DeFi discourages investors. In order to eliminate this obstacle, CrescoFin provides supporting insurance for its crypto savings products. In the event of bad debts, investors will receive claims provided by the London Lloyd Insurance Market. Risk hedging.
On the other hand, CrescoFin intends to start from Aave, and has submitted a proposal to introduce real-world assets into Aave on the Aave community forum , that is, by packaging real-world assets into a stable interest-bearing token asset and supporting insurance Open to Aave investors, which is expected to digest the liquidity on the Aave chain and increase capital utilization. Once successful, it is expected to be implemented in a wide range of DeFi markets to solve the problem of over-collateralization . At the same time, the investment plan after reducing risks will be beneficial to Institutional investors are introduced to Aave.
What is the proposal?
The proposal was submitted by the Swiss blockchain-compliant financial institution CrescoFin. The proposal hopes to add a currency market to the Aave agreement, allowing compliant crypto investors to obtain cash flow risk exposure backed by real economic assets.
Specifically, users can deposit the stable currency USDC and get the encapsulated token iCRES that represents principal and interest. This product can provide investors with an annualized 3.00% interest income, which is higher than the income of traditional savings products.
The entire process is led by CrescoFin, and insurance is provided by the Lloyd Insurance Market in London. As the first compliant DeFi product, investors need to pass CrescoFin’s KYC verification. Therefore, only compliant addresses can receive and trade iCRES tokens.
CrescoFin is a compliant blockchain financial institution in Switzerland, focusing on institutional investors in the traditional financial sector serving the US dollar, euro and Swiss franc markets. It is currently developing and expanding use cases for stablecoins.
CrescoFin’s vision is to provide a blockchain solution to replace banking, and believes that the key to achieving this is to offset the bank’s psychological advantage-insurance. So far, CrescoFin has invested 125 million US dollars in product development.
How it works
According to DeBank data, the total DeFi lock-up volume (TVL) has exceeded 16 billion U.S. dollars , of which Aave ranked third with a total lock-up volume (TVL) of 1.6 billion U.S. dollars .
Such a huge liquidity in DeFi needs to be digested, especially if it is related to the real world, in order to generate value. CrescoFin believes that the loan demand of real-world companies and the asset growth demand of DeFi investors can be connected through the blockchain and tokenization mechanism. In order to eliminate investors’ risk concerns, CrescoFin provides a supporting insurance policy, thus becoming the first real In the sense, it can replace the DeFi alternative to bank deposit accounts . Or it is expected to introduce more institutional-level users to Aave, popularize the adoption of cryptocurrencies and further expand the DeFi market.
According to the proposal issued by CrescoFin, the plan includes the following series of specific procedures:
- First, CrescoFin will purchase a series of “notes” from the real world, which will be paid by (buyers of various companies) within the next 7 to 30 days . In order to further reduce the risk, CrescoFin also provides supporting credit insurance. Once the buyer breaches the contract and fails to pay, Aave investors can apply for loss claims .
- In addition, the services provided by the seller to the buyer are recorded on the blockchain . This eliminates the possibility of disputes between the parties.
- These bills against the payments will flow into a CrescoFin in Switzerland Guthrie silver (UBS) opened a trust account.
- CrescoFin will create iCRES tokens based on this account, which is anchored 1 to 1 with the purchase price of the bill, and the unit is 1 USD. In essence, this is a voucher based on real-world bill collateral.
- Investors can use a stable currency USDC buy iCRES token, the token issued to holders of a day to 3.00% of stable interest rates to currency-based, that is, hold interest iCRES daily tokens to collect tokens iCRES valuation.
- The more collateral in the real world generated, the more iCRES tokens will be minted and sold to investors.
- Investors can freely trade iCRES tokens in the market, provided that the wallet address has passed the CrescoFin KYC review , and only the wallet address included in the specific registration form can trade tokens. Similar to bonds in traditional financial markets, the price of iCRES tokens is inversely proportional to the expected yield (interest rate). In other words, if investors accept an interest rate lower than 3.00%, the token price will increase. Otherwise, the price of iCRES tokens will fall.
- If investors want to withdraw USDC, iCRES tokens are burned and they are repaid to investors.
In essence, iCRES tokens provide investors with an insured financial product. The tokens purchased by investors represent bills purchased at a certain discount. The bill will be repaid at a higher value in the future (that is, iCRES tokens are paid with a fixed interest payment of 3.00%). If a bad debt occurs, it will be paid by insurance and the investor will receive a claim. Since Switzerland does not levy a capital gains tax, all proceeds are passed on to investors without any tax deduction.
other information
1. Once the proposal is passed and implemented, it will encourage real-world assets to enter the DeFi ecosystem in a low-risk and regulated manner. It is expected to expand the overall scale of DeFi and promote its organic growth.
2, CrescoFin using Chainlink oracle to provide price information, and provide proof of reserves related data to verify that all collateral iCRES tokens fully insured.
3, iCRES is regulated by an asset, with built-in compliance function that uses the C layer standard (C-Layer Standard), which is an open source compliance audited in line with MIT software license.
4. Currently, CrescoFin has optimized the gas cost of iCRES tokens.
5. The products listed in the proposal have been granted securities codes by the International Securities Identification Number (ISIN) .
Source link: governance.aave.com
