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Centrifuge allowed New Silver, the first financial institution, to establish a real estate repair transfer loan pool in its Tinlake contract, relying on MakerDAO as a credit facility to complete the first loan financing.
Written by: Lea Schmitt
Centrifuge and Maker complement each other, connecting the real world to DeFi without trust. On the one hand, Centrifuge has been cooperating with traditional small and medium-sized enterprises and financial institutions to provide a comprehensive infrastructure to connect the two parties, and finally achieve a multi-party integration based on transparency, efficiency and trustlessness. On the other hand, Maker governance can provide instant liquidity for asset promoters’ asset financing with minimal cost.
The Maker protocol, also known as the Multi-collateral DAI (Multi-collateral DAI: MCD) system, is currently the largest DeFi protocol with billions of collaterals. It allows users to use collateral assets approved by “Maker Governance” to generate DAI.
The cooperation between Centrifuge and Maker means that asset promoters (shadow banks) can obtain additional benefits by simply minting tokens through Centrifuge. In other words, they can own Maker Vault, lock up their tokenized assets, and withdraw stablecoins to fund new loans. Asset promoters NFTize real-world assets and place them on platforms like MakerDAO for mortgage to obtain loan lines (the specific operations are explained in the previous article). In this way, we can imagine that when a bank grants credit to borrowers, this “bank” operates around the clock, operating trustlessly on smart contracts, without intermediaries, and without regulatory restrictions. It can provide low interest rates and with minimal capital. Cost provides immediate liquidity.
Where should we go in the future?
The potential of RWA (Real World Assets) is huge. RWA covers everything and entities that can be digitized. Centrifuge is working with diversified asset originators to provide financing for assets including invoices, real estate or music royalties. There are currently six companies in the active MakerDAO governance process, and they plan to expand the scale of RWA together in the next 12 months, and the size of MCD can reach 300 million.
With the development of more RWA applications, DAI will become the most diversified borderless currency in the world. The combination of Centrifuge and Maker makes DeFi more competitive and more scalable than traditional asset financing.
MKR and Centrifuge issue the first real-world DeFi assets
Centrifuge allowed New Silver, the first financial institution, to establish a property repair transfer loan pool (fix and flip loans) in its Tinlake contract, relying on MakerDAO as a credit facility to complete the first loan financing. New Silver now has a credit line of $5 million in Maker, becoming the first financial institution to support DAI with RWA, opening the door to the new trillion-dollar market for DeFi.
Through Centrifuge, real-world financial institutions can operate around the clock, run trustlessly on smart contracts, can provide low interest rates, and provide instant liquidity with minimal capital costs.
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