Credefi AMA Recap
Credefi connects crypto lenders & SME borrowers from the real economy. It facilitates lending to portfolios of businesses, protecting lenders while providing them fixed APY that is uncorrelated with crypto markets’ volatility.
On November 15, Ivo Grigorov, CEO of Credefi joined us to answer our questions.
Ivo Grigorov, CEO of Credefi
I studied at one of the best schools and universities in Switzerland and the UK in the field of banking. In 2017 I started trading purely as speculation and just learning about space. I was doing lots of fundamental research as part of my trading strategy and soon entered into the rabbit hole of blockchain and the way it can revolutionize the financial markets.
Questions from the CryptoRank team
#1. Can you tell us about Credefi? What problems do you solve, both in the space and for the community?
Ivo G.: – Together with the other core team members, we have 40+ years of experience in leading roles in the finance industry and we have seen first-hand its limitations, inefficiencies, and great friction of transactions. At the same time, being blockchain enthusiasts, we witnessed the tremendous growth of DeFi and in late 2020 we had thе light bulb moment that we should connect the dots and bring DeFi to SMEs. We believe DeFi is the future of banking and are quite frustrated that so far it has had 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 At the same time, we aim to become a gateway to DeFi for SMEs and render obsolete the outdated, bureaucratic, and overregulated banking services SMEs now have to cope with, replacing them with a quick, flexible, and user-friendly funding solution.
#2. Could you briefly describe the milestones Credefi has achieved, and about your upcoming plans?
Ivo G.: – 2021 was very eventful for us and we dare say successful, we have just finished our IDO last week and it was a big milestone for us with more than 800 participants and filled cap according to our tokenomics. 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.
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 on November 17th 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 world as possible.
We are currently preparing for our CEX and Dex listing in the coming days. 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.
Questions from Twitter
#1. Revenue is an important aspect for all projects to survive and maintain the project/company. How have you been able to build a complete project and what is the way to generate profit/revenue of the token? What is the income model?
Ivo G.: – We believe one of the goals of DeFi is to cut the middleman as much as possible and allow money to flow seamlessly and without friction (fees). That’s why we do not do arbitrage between lenders and borrowers and do not have an interest spread – we are not a bank after all! Also, we do not leverage our lenders’ capital by staking it on other platforms, etc. – funds go straight to SMEs and lenders have full transparency on where their money is deployed and what projects and companies they are funding. Of course, the platform has to earn revenue to keep the lights on and we do so by charging borrowers a fee when they obtain a loan – this is our only source of revenue.
#2. How to generate credit score data in Credefi? What is the significance of these scores?
Ivo G.: – We have designed two specific scorecards, their purpose is to give us a very precise probability of whether a borrower will repay their loan or not. These models are core for us to be able to offer loans without asking for over-collateralization. They are part of our three-layer protection mechanism for our LPs. The data used in them is statistically derived and utilizes company-specific data.
#3. Credefi will solve the key challenges that DeFi and TradFi face today, but could you really describe to us what are those big challenges that you are facing? And really the only platform that is working on solving them is Credefi?
Ivo G.: – Credefi 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 clear proof of that. We see that speculative borrowers cannot satisfy the 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.
Questions from Telegram
#1. Do you have any plan for burning tokens in the future to reduce the supply of the token and increase its investment attractiveness?
Ivo G.: – Our tokenomics is designed and inspired by the latest trends and developments in 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.
#2. Does your project support the staking program? If yes. how is your stake system work, can you tell me what is the requirement for users if they want to stake in your platform?
Ivo G.: – Yes you 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.
#3. On your website you don’t mention that you have done any internal or external audit of your smart contract, so can you give us details if you have done any audit before? And in case you haven’t, would you plan to perform any review of your smart contract in the near future?
Ivo G.: – Our development team is constantly looking for and acting to resolve any potential vulnerabilities, however small they may be. We would also conduct a bug bounty program after IDO and implement all relevant findings to ensure maximum security of our platform when we launch. 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.