Hello, Satoshi clubbers! Another AMA took place in Satoshi Club and we would like to introduce to you the AMA session with our friends from Credefi and our guest, @ivogrigorov. The AMA took place on the 12th of November.
The AMA session was divided into 3 parts with a total crypto reward pool of 500$.
In this AMA Recap, we will try to summarise the most interesting points for you.
Part 1 — introduction and questions from the Telegram&WebSite
D. | Satoshi Club: Let’s start again! Hello Satoshi Club! We are happy to announce our AMA session with Credefi! Welcome to Satoshi Club 😀
Today our guest is @ivogrigorov! 🚀
Mary | Satoshi Club: Hello Satoshi Club! We are happy to announce our AMA session with Credefi! Welcome to Satoshi Club 😀
D. | Satoshi Club: @ivogrigorov, happy to have you here 😊
Shv: Hi, it’s a pleasure to be here!
Mary | Satoshi Club: Welcome here 👍 How was your day? 😀
Shv: Well we are pretty busy but in the mean time really excited. We have just completed our IDO and are rerouting to our listing. So all in all we are in great shape!
D. | Satoshi Club: Awesome news!
Mary | Satoshi Club: Congratulations! 🎉🎉🎉
So, let’s start our AMA 🚀 Could you please introduce yourself and tell our community more about Credefi? 🚀
Shv: My name is Ivo Grigorov and I am the CEO of Credefi. 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 De-Fi and in late 2020, we had thе light bulb moment that we should connect the dots and bring De-Fi to SMEs.
We believe De-Fi 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 De-Fi 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 At the same time, we aim to become a gateway to De-Fi for SMEs and render obsolete the outdated, bureaucratic and overregulated banking services SMEs now have to cope with, replacing them with a quick, flexible and user-friendly funding solution. And this is the reason we have created Credefi.
Mary | Satoshi Club: What are the main obstacles you have faced in this connection?
Shv: To connect the De-Fi world with real businesses is a very challenging task that few projects have set to achieve so far. We have faced numerous challenges, including disbelief by many that such a connection can be established in practice and that the system will work at all, but I’d like to highlight two major hurdles: getting small and medium companies onboard and educating them what is De-Fi and how they can benefit from Credefi, and enabling the use of real-world collateral in a safe and regulatory-compliant way.
On the first one, we have already been on the road, talking both to individual companies and to business associations throughout Europe, trying to get the message across that De-Fi is the future of finance and Credefi makes that future happen NOW. Thankfully, entrepreneurs and business owners are smart and forward-looking and most of them have embraced the opportunity to get De-Fi funding. We have already accumulated a pipeline of over $10 mln in projects and loans that are ready to be funded and will be live on the platform on Day 1.
On the second point, we have developed a structure where borrowers communicate with a very experienced collateral manager who is licensed to operate across the EU and will help companies pledge the required collateral as quickly and easily as possible. At the same time, our partner is very efficient in liquidating collaterals, going through court procedures, etc. So lenders can rest assured that the real-world collateral is managed by professionals and can be quickly liquidated in case of default.
D. | Satoshi Club: Great answer, thank you! 👍
Mary | Satoshi Club: Very detailed answer!
D. | Satoshi Club: Have you stood behind some other projects in crypto before Credefi? Or this is your first experience to build something in crypto and De-Fi?
Shv: Well directly as co-founders we have not been involved in the development of other crypto projects our developers have. However, we have been in the crypto space for quite some time and we have followed the trends so indeed we have seen what is missing.
On the other hand, we have a vast experience in the traditional finance sphere so we decided to bring something new and innovative to the crypto sphere which solves problems users are experiencing, having seen these problems personally before as users ourselves.
Mary | Satoshi Club: Thank you for this detailed intro! After it, we are ready to dive deeper into the details of Credefi with the questions from our community! Are you ready to start?
Shv: Indeed.
Q1 from Telegram user @victorogb:
Credefi recently concluded its IDO event on Cardstarter a couple of days back, and it has made plans to embark on some notable events as a follow-up to its IDO. Firstly, can you kindly brief us on the outcome of the IDO event, how successful was it, and how was the general investor turn up? Finally, with a planned roll out of notable events such as: listing on CEXs and DEXs, token distribution, distribution of placeholder tokens vCREDI, BSC bridge and PancakeSwap listing, staking programs and lots, can you therefore give us a detailed roundup on how these events and more will be thoroughly carried out, and what would be the possible dates and timelines to these notable events?
Shv: The IDO was a really big milestone for us, and I dare say quite a big success. More than 800 people participated and we have successfully completed the allocation as per our tokenomics.
As to the second part of the question, of course the first step is to do our listing with a renowned CEX and DEX. In any case I can assure you that our backers, investors and community will not be disappointed in this direction.
As to the other details, it will take quite some time to write the text here, but we have prepared a very thorough article where everybody can see the next steps: https://medium.com/@credefi/credefi-listing-update-78e3878c4e0
D. | Satoshi Club: Great! 👍 As I see, we are currently on Phase 1, according to your roadmap? Is the platform launch just around the corner? Will the access to the platform be available to all people from any country, or you have some restrictions regarding this?
Shv: Indeed we are product ready with Phase 1 and it is coming out according to our roadmap. However, in order to be as secure as possible we are doing a guarded launch, which means that users of the platform which want to act as lenders and LPs can access and use it from anywhere (except the standard black listed countries), but users which act as borrowers will be restricted only to the EU.
We have designed it in that way just to give as much security as possible to the lenders. In any case the project is global and once we are fully operational, anyone can participate as both lenders and borrowers.
Mary | Satoshi Club: Thank you for your answers! Ready to go to the next question?
Shv: Yes.
Q2 from Telegram user @Ecmq10:
Hello Credefi team! One of the slogans that stands out the most when we enter the Credefi website says “We resolve the key challenges that De-Fi and Trad-Fi are facing today.”. To be honest, De-Fi really faces a lot of significant challenges. Are there any specific challenges that Credefi primarily focuses on? Of all the challenges facing De-Fi, which is the main one to which Credefi aspires to provide a solution? According to what you have observed all this time, what do you think should be the challenge to which a solution should be provided as soon as possible? And what tools do you have to achieve it?
Shv: We do want to provide transparency, security and also serve as a gateway for real-world businesses to the De-Fi world, while providing stable and fixed APYs, which are uncorrelated to the crypto market volatility. De-Fi yields are inconsistent, fragile, and evaporate in bear markets. De-Fi borrowers are speculative and fickle and cannot satisfy De-Fi lending supply. While SMEs need reliable lending sources, De-Fi needs reliable creditworthy borrowers, so Credefi brings them together in a win-win.
In order to achieve this bridge between Trad-Fi and De-Fi, we are providing lenders with the toolset needed to be able to take an informed decision, as well as being extremely secure due to our implementation of a 3-layer security mechanism. Our security mechanism consists of credit risk assessment models (verified by Experian), real-world collateral assets and our Module X.
Mary | Satoshi Club: What is Module X? Did you develop it yourself?
D. | Satoshi Club: Btw we a have question about this in this part, a bit later 😉
Mary | Satoshi Club: Ohhh, sorry 🙂
Shv: No worries.
Mary | Satoshi Club: Do you have to add something or we can move to the next question? 😀
Shv: I think we can move on.
Q3 from Telegram user @Highpee:
In your whitepaper, you highlighted 5 inefficiencies of the centralised financial system which include: centralised control, inefficiencies, inaccessibility to complete financial services, absence of interoperability/interconnectivity and lack of transparency. However, one of the first public partnership announcement is with Experian, one of the top centralised credit score and financial management platform. Can you explain the extent of your relationship/partnership with Experian, considering the limitations of the centralised settings? What benefit will this partnership afford you and how will it assist your risk assessment, credit rating algorithm and reduced friction in your lending process? Also, can you tell us about the Experian Innovation Week because I learnt that you are one of the keynote speakers and you are going to speak as a De-Fi ambassador during this event?
Shv: Experian is one of the top 3 data analytics and credit scoring agencies in the world. Our partnership will allow us to validate and calibrate our in-house credit scoring models. We need a massive amount of data, which Experian will be providing in order to achieve high accuracy models that will be acting as a security layer for all the lending activities on our platform. Those risk-assessment models, will allow us to score borrowers precisely and not demand more (or less) collateral than is really needed (this is an obstacle which we have identified as leading in the De/Fi segment) , reducing friction in the lending process.
Going forward, we will benefit from the AI and ML technologies, in order to create self calibrating models that will be able to reflect all the necessary adjustments. We intend to achieve this by also partnering with other blockchain projects such as Lithium Finance, SupraOracles etc. As we have stated, we aim to bridge Trad-Fi and De-Fi, this is visible also not only in our business model, but also in our partnerships.
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 De-Fi in traditional finance circles, as well as the other way around. The Experian Innovation Week, will provide us with the opportunity to showcase Credefi and blockchain’s benefits and the opportunities we bring, as well as sit alongside major players in the finance world.
D. | Satoshi Club: Big thank you for such a detailed answer! 👍
I think we can move to the next question or you want to ask anything else, @madamlobster? 👀
Mary | Satoshi Club: Such a full answer! I have nothing to add 🔥
D. | Satoshi Club: Ok! then let’s move forward! 🚀
Q4 from Telegram user @chinyere2020:
According to your tokenomics, the Credefi ecosystem will make use of two tokens which are: $CREDI token (the native token of the Credefi ecosystem) and $xCREDI (will be used to participate in future governance).
I understand that $CREDI holders will be divided into tiers and each tier will bring different utilities and benefits to the $CREDI token holder. Can you list the tiers available and what determines the tier a holder will belong to? Can you also mention some of the benefits/utilities associated with each tier? How can users get/own $xCREDI and what are some of its use cases?
Shv: We have currently designed six separate tier levels for $CREDI holders. Via holding our native token $CREDI, users on the platform will be able to:
- Boost their yield (if they are lenders), by reducing the margin which Credefi collects on each loan by up to 33%
- Reduce their fees (if they are borrowers), by reducing the origination fee which Credefi collects by up to 33%
With regards to $xCREDI, users can acquire $xCREDI via staking $CREDI in our Module X or buying it on the market. Any $CREDI deposited in Module X is subject to 10 months vesting at a rate of 10% per month.
Once a user has obtained $xCREDI they can opt for:
- Participate in Credefi governance
- Provide liquidity to the $xCREDI DEX pair, stake their LP tokens and receive $CREDI as additional incentive on top of the trading fees
- Sell $xCREDI since there will be continuous demand due to the buyback and LP program, where 10% percentage of all fees/interest collected on the Credefi platform will go towards a buyback and liquidity provision program for $xCREDI. The resulting LP tokens would be burned. This will create constant deflationary pressure for $xCREDI
It is worth mentioning that the $CREDI/$xCREDI conversion rate is defined as a bonding curve, where the more $CREDI is converted to $xCREDI, the more expensive subsequent conversions become.
D. | Satoshi Club: With which crypto assets will you be working in Credefi (USDT, ETH, BTC etc.)
Shv: Initially, we will be accepting all of the major stablecoins such as USDT, USDC, DAI ect.
Mary | Satoshi Club: What aspects does your governance cover?
Shv: We have a more detailed explanation as to the governance in our tokeneconomy paper, however in short, it is going to be in three stages: “Early days” phase, “Semi-decentralisation” phase and “Decentralisation”.
Our long-term vision is to have fully autonomous DAO where the governance participants will be able to nominate, evaluate, and approve borrowers coming to Credefi. That’s on the operational side of the governance aspect.
On the future development side, the governance participants will be able to participate in voting of the major developments associated with the protocol and direction we should be taking in case of out of ordinary business events such as Black Swan.
Mary | Satoshi Club: Thank you for your answers! Ready to jump to the next question? 🚀
Shv: Yes.
Q5 from Telegram user @Arisabela:
According to your website, you’ll be implementing a 3-layer security for your platform lenders. Could you tell us about Credefi’s security module and how will it prevent possible attacks from external parties all the time? What’s the real protection you can get from it?
Shv: Our Module X is part of the 3-layer security mechanism that is implemented into the Credefi business case and platform. Module X is a staking module, where users will be able to stake our native token CREDI and essentially stabilize and secure the platform via bridging the time gap between a borrower stopping payments and the moment their collateral is liquidated and returned to lenders.
Users who stake $CREDI in Module X will not only secure the platform, but will also be able to mint $xCREDI, participate in the platform governance and receive higher APYs via our reward mechanisms.
The three layer mechanism is actually designed to prevent loss of lender’s funds due to loan defaults. As to potential cyber attacks from external parties, we are constantly on the lookout and using the best practices in the industry. We have undergone an audit on our smart contract and performing cyber security checks constantly.
Mary | Satoshi Club: Thank you! More than a full answer! Ready to proceed with the next question? It is connected with this in some points 😀
Shv: Sure.
D. | Satoshi Club: The last question from part 1 🙌
Q6 from Telegram user @MudaraSilva:
I noticed that your platform supports direct peer-2-peer finance. Did you examine the issues related to the reliability? For example, if a borrower does not repay a loan, do you guarantee to return the funds to the lender on behalf of the borrower? What will happen if a borrower faces an accidental death? Do you have any partnerships with insurance providers to solve this type of problems? Please explain the nature of your intervention in problematic circumstances. Moreover, can lenders minimize these issues? Is there an option for them to check the history of borrowers before lending?
Shv: In Phase 2 users will be informed on the risk levels of each borrower and the appropriate levels of interest or collateral value they should be looking at (giving users to have an informed choice). However, lenders and borrowers will have the right to negotiate their own terms of the transaction.
In case of default, we will act on the behalf of the lenders and take measures in order to recuperate the funds. This is why we have designed our three-layer protection mechanism where we also partner with a licensed financial institution to act as a collateral manager and liquidator. So in case of non-payment they will liquidate the collaterals. And yes, we are also using an insurance company to further secure the loans.
D. | Satoshi Club: I have a little additional question about your staking module. If a staker decided to unstake $CREDI, will he face any unbonding period (like he should wait a couple of days to get his tokens back) or tokens will be available immediately? And what about rewards for staking, will they be locked before a particular time or a user can claim them daily?
Shv: The question is actually quite broad, there is more detailed information in our whitepaper.
Mary | Satoshi Club: Thank you for this first part! It was very informative!
Ready for the live part? 😀
Shv: Yes!
Mary | Satoshi Club: Let’s go 🚀
Part 2 — live questions from the Telegram community
Q1 from Telegram user @Mission_Borishal:
Audit is important for both trust and security. Have you done any audit for your project?
Shv: 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.
Q2 from Telegram user @adaatalay:
Lenders are always at risk of credit default. The higher the loan APY, the higher the risk. Can Credefi (10%) sustain APY? What kind of protection mechanism do you have to protect lenders?
Shv: Our 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.
Q3 from Telegram user @Rakshhitx5:
One of Credefi’s greatest features is P2P lending, But there are many other projects in the market that offer the same services, so can you tell us what makes Credefi’s P2P lending unique among these existing projects?
Shv: Credefi is a new breed of De-Fi protocol tapping into the trillion dollars market of real world companies and assets. We do that in a structured and disciplined way, harnessing the best from both the Trad-fi and De-Fi domains. We have a battletested in-house credit scoring allowing the lending to proven and credible borrowers while protecting our lenders and LPs, and providing them fixed and stable APY.
We are different from our peers by performing our own credit scoring in-house and accepting real-world assets collateral that will be administered and managed by a licensed financial institution.
We also emphasize on the security for lenders as our main priority and thus, we’ll kick off our operations using guarded launch, accepting initially borrowers primarily from the European union with the aim to limit the risk of default.
After our operations are well established in the EU, we’ll be expanding to Asia and Africa and start introducing loans with low to non-collateral requirements.
Q4 from Telegram user @hansoyeon:
What are the roles and uses of $CREDI and $xCREDI in the ecosystem? Will you have a token burn, cashback mechanism and staking program?
Shv: Our tokenomics is designed and inspired by the industry leaders like AAVE and SUSHI. 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 utility token CREDI in Module X, users 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 to users.
CREDI is our utility token that will be used to reward activity on the platform and act as an additional security layer by being staked in Module X. We will have a tiered structure for lenders and borrowers, whereby the more $CREDI you hold (and stake), the better terms you will receive.
xCREDI is our governance token that will be minted only by staking and burning $CREDI in Module X. $xCREDI holders will be able to shape the path of Credefi in the future as we move towards a completely decentralized platform.
Q5 from Telegram user @Asela1112:
According to the Cryptopotato article, Credefi has raised $1.8 million through the Private Round and it seems that a lot of VCs accepted you. What will you do with the $1.8 million fund?
Shv: The funding will be used to finish the platform development for Phase 2 and Phase 3, as well as to sustain initial operations starting in December.
Q6 from Telegram user @kouseibb:
What is the way that generates profit to maintain your project and what is your revenue model? How is it going to benefit both investors and your project?
Shv: We believe one of the goals of De-Fi 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.
Q7 from Telegram user @messilolz:
How will the buyback and burning mechanism of your projects work? What are the sources of revenue for buyback and can community governance decide on burning tokens?
Shv: We have implemented a buyback, LP and burn mechanism for xCREDI token. Credefi will allocate 10% of the profits collected from operating activity to buyback xCREDI tokens from the market, LP them and burn the generated fees from the LP.
Q8 from Telegram user @Ava_renee:
Can you briefly describe your partnerships so far and upcoming partnerships?
Shv: Currently we have concluded several strategic partnerships with great projects and companies such as 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.
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. More are in the making and will be announced shortly in our official channels.
Q9 from Telegram user @cindy0666:
Is Credefi’s target audience SMEs? Can you tell us about your risk assessment models? How do you ensure the security of lenders?
Shv: Yes, we have initially concentrated on SMEs as there is a huge gap for financing. This is a major deficiency of the Trad-Fi sector. We have developed in-house risk assessment models, which are targeted at SMEs.
The models will be verified and calibrated using Experian extensive data sets. The security of lenders is ensured by the already mentioned 3-layer security mechanism, which includes the risk assessment models, real-world asset collateral and our Module X.
Part 3 – Quiz Results
As usual, for the third part, Satoshi Club Team asked the chat 4 questions about the crypto project. A link to a Quiz form was sent into the chat.
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