On September 10th, Centrifuge joined hands with Odaily and PolkaWorld to hold Interstellar Cruise - Explore the new Polkadot DeFi paradigm with Centrifuge, and the Altair Parachain Auction Conference, sharing and discussing the behind-the-scenes of the Kusama auction from the perspective of bidding first-line project parties Stories to explore new opportunities for Polkadot ecology. (Click to enter the live room/watch the video replay.）
On September 10th, Centrifuge joined hands with Odaily and PolkaWorld to hold Interstellar Cruise - Explore the new Polkadot DeFi paradigm with Centrifuge, and the Altair Parachain Auction Conference, sharing and discussing the behind-the-scenes of the Kusama auction from the perspective of bidding first-line project parties Stories to explore new opportunities for Polkadot ecology. (
At the event, Centrifuge co-founder and CEO Lucas Vogelsan delivered a speech on the theme of Centrifuge=Centrifuge Chain+Tinlake. Lucas believes that the key to the full-speed and vigorous development of Polkadot and Kusamas ecology is cross-project cooperation and building service functions based on each other. On-chain exchanges, with this degree of standardization and interoperability, the user experience of DeFi will be far better than traditional financial services.
The following is the full text of the speech, edited by Odaily, enjoy~
Lucas also said that the Altair parachain is being auctioned, aiming to promote cooperation between different projects in the Polkadot ecosystem, so that the DeFi of the Polkadot system can truly operate under the same set of standards.
The following is the full text of the speech, edited by Odaily, enjoy~
Hi, my name is Lucas and I am the co-founder and CEO of Centrifuge. As the host outlined, Centrifuge is creating a decentralized platform that links real-world assets such as invoices, real estate, and royalties. With this platform, borrowers can raise funds without intermediaries such as banks.
Today, I will focus on DeFi-related topics rather than real-world assets, and I will also focus on Centrifuges exploration of the cryptocurrency field in the past 4 years. I will comment more on other projects instead of focusing on my own. The purpose of expressing these comments and thoughts is to let everyone know whether Polkadot and Kusama can rely on our parachains, and how we can make the Polkadot and Kusama ecology flourish at full speed.
Let me start with some background.
The simplest description of Centrifuge is to allow anyone to initiate a credit fund on the chain and establish a pool based on various collaterals such as loans, real estate, and overseas land invoices. So these new financial tools will allow people to obtain liquidity on DeFi, which is similar to allowing physical businesses to borrow money.
So why do people want services like this, and why are we doing this?
In the real world, most borrowers are at a disadvantage in the traditional financial system because their lending counterparties are super-large groups or participants with high capital volumes.
For example, Google could sell corporate bonds at 0.5% per annum. Thats its cost of capital. If you are a small business, such as opening a tavern, you will face an annualized borrowing rate of 10-15%, but your risk is not really as high as 30 times that of Google. How did such high borrowing rates come about? In fact, it came from a bunch of intermediaries because they couldnt build an effective (assessing risk) way.
Let’s look at DeFi again. DeFi does not need an intermediary at the beginning of its establishment, and everything on the chain is transparent and fluid. This makes us think about how to pass on the advantages of DeFi. At present, DeFi is on a nearly vertical growth curve, but (in terms of volume) it is still only a small part of the real financial world. Bringing real-world assets into DeFi can allow DeFi to scale dramatically. Achieving this is changing the world for us. In the future, DeFi will not only serve a small number of technicians, but also serve more people who want to receive education, buy cars, or do business.
Speaking of two figures, the TVL of DeFi is around US$80 billion, and JP Morgan has US$25 trillion in custody funds, which is more than 300 times that of DeFi. And our goal is to make DeFi services accessible to everyone.
Think back to the blockchain industry in 2014, and you might only think of Bitcoin.
Later, there was Ethereum. Although Ethereum was still very early at that time, as long as you have a computer, you can perform any type of transaction, or issue a token of the ERC20 protocol. This is very common today. You can Many currencies are traded on the chain. But at the time, this was where it all started.
In April 2017, Maker launched DAI as a single collateral. Users can exchange ETH for the stable currency DAI. This iteration is a very important second step. Because not only do you have different kinds of assets, but you can also have stablecoins, which represent the dollar, and at least a lot of people trust stablecoins to some extent, so putting this asset on the chain is very valuable .
Before Uniswap and AMM, the largest token generation in the circle in 2017 gave birth to the ICO era. In that year, Bancor created the earliest AMM. In the following years, the market was in the ICO bubble. At that time, there was not only some infrastructure in the market, but also a large number of assets facing the demand for transactions and liquidity. Shortly after the launch of all ICO projects, the first lending agreement was born. In 2018, Dharma began to discuss the tokenization of debt, trying to allow people to borrow MKR for ETH or Kyber for DAI. This brings us to another important component of the infrastructure.
Today, users can short some assets and earn profits by borrowing. 2018, the year I think things really kicked off, also looks similar to the DeFi market today.
With the evolution of Uniswap, projects are now able to actually create liquidity and issue tokens in the market. Back then, the market value of Uniswap was very low, and the gas fee of Ethereum was also cheap, so people could do various experiments. By the beginning of 2019, the TVL of DeFi was 327 million US dollars, and Maker, Compound, and Uniswap were all at the top. After that, the Summer of DeFi came. Right now, were in a wild bull market phase in which Musk and others are in on the action. The bull market is justified because the blockchain allows people to transfer value trustlessly on a system developed by code, without government regulation and banking systems, which has been difficult to achieve in the past and is different from the traditional financial system. To some extent, DeFi is the killer application of blockchain.
Lets see how this works?
I think it started with ERC-20 tokens, because ERC-20 opens up compatibility between projects on Ethereum. (Imagine you transfer money from your stock account at Bank A to Bank B and use a third party service. Its a nightmare to fill out ten different forms, wait weeks, and pray that they all interoperate before you can transact. ) With ERC-20, we were able to get this compatibility from the start. This is an important part of the infrastructure - a token design standard.
Another important thing is that projects on Ethereum work very closely together and build on top of each other so that each project can only focus on its own domain. At a certain critical point, there will be a foundation for real take-off.
After learning about the development history of the Ethereum ecosystem, I wonder if Polkadot can fast forward these 5 years?
The Polkadot project has been progressing very quickly, and there are also many projects that cooperate with each other, build on each other and try to do some experiments.
This is very important to accelerate the maturity of the Polkadot ecosystem, because we have a good start. Interoperability and standardization can make the user experience better.
Another important thing that can be learned from Ethereum ERC20 tokens: every wallet knows how to use, send and create ERC20 tokens, and has the same interface to support these transactions. This shows that we cannot do everything by ourselves, but as community members, we cooperate with each other to make different assets exchangeable.
In a complete set of on-chain business models, it will actually involve the participation of different DeFi projects. Some people need payment, some buy ETH to pay gas fees, some mint an NFT, and some lock assets in the Centrifuge pool. There are also users who borrow DAI from Maker as collateral, then go to the transaction aggregator Paraswap, 1inch, Curve to convert it into USDC, and then use Circle and other exchanges to convert it into legal currency... a very long chain, yes Bar?
We want a user to be able to complete several transactions in minutes, rather than waiting weeks for a process like going through a bank.
The blockchain metaverse will enable each participant to cooperate and win-win.
For Centrifuge, this means that we hope that our assets can be used as collateral, and that other DeFi projects can also use real-world assets to gain a huge user base.
I am very happy to announce that the Altair parachain we launched on Kusama is in the auction, aiming to promote the focus I mentioned earlier-cooperating with other projects and jointly establishing standards to make the DeFi of the Polkadot system really run.
