Thread by @DavidRakusan

No company has cracked the connection of real-world assets to the blockchain yet. However, @centrifuge targets the issue in a unique way and the team is very close to achieving an unstoppable network effect. The CFG token might reach new highs in the coming months. See why👇1/22

@centrifuge is a blockchain for tokenization of real-world fixed-income assets, such as invoices, royalties, and mortgages. The blockchain is built on Polkadot and connects to Ethereum via a bridge. 2/22

The first application on the Centrifuge network, Tinlake, brings real-world yield to the #DeFi ecosystem by letting customers (asset originators) borrow against their tokenized real-world assets. 3/22

These real-world assets can be locked as collateral in liquidity pools. Investors provide funding to the liquidity pools and finance the assets locked in them. There is almost $30M locked in the liquidity pools yielding between 38% - 45% p.a. thanks to the $CFG rewards. 4/22

In early July, I created a chart summarizing 10 of the asset originators. Now, there are already 12 liquidity pools and each is offering a different type of collateral asset. The TVL is growing at 73% CMGR from the end of October 2020 to June 2021. 5/22

By the end of the year, we expect approximately $445M in TVL and $186M in new monthly originations. This might seem high vs the current $27M, but there are big things cooking behind the scenes. Check this community call from 19:22 - 26:30. 6/22

Tinlake enters into conversations with large asset originators that might be interested in launching pools $100M+ in size right from the start. Launching one or two such pools later this year will make the $445M target suddenly look small. 7/22

Revenue on the Centrifuge blockchain will be generated mostly by originating new fixed income securities. Whenever a new loan is financed from the pool, the protocol takes 30bp fees and, from a portion of the collected funds, buys back CFG and then burns it. 8/22

@centrifuge is backed by industry leaders and @RBF_cap is happy to be one of the early investors. We are happy to work with @ctcunning, @thespacecatjr and of course @lucasvo and @mr_optimax to bring Centrifuge to the masses. 9/22

But wait there is more. 👀 Centrifuge has established at least two key partnerships, one with @AaveAave and one with @MakerDAO. Partnership with MakerDAO enables the assets from Tinlake to act as collateral in a MakerDAO smart contract. 10/22

The integration with MakerDAO is already implemented - New Silver pool can borrow up to $20M from MakerDAO. Furthermore, deeper integration with MakerDAO has passed. HarborTrade, ConsolFreight & FortunaFi pools will also be integrated soon. 11/22

vote.makerdao.com/executive/temp…

The Aave partnership will enable the users to provide
capital directly into Centrifuge’s pools within the newly planned permissioned Aave protocol. 12/22

governance.aave.com/t/arc-aave-cen…

Deep integrations of Tinlake’s pools with #DeFi protocols such as #MakerDAO and #Aave will place Tinlake at a first-mover advantage when it comes to financing real-world assets through #DeFi protocols. 13/22

The market that Centrifuge targets is huge. The total global amount of asset-backed loans originated is measured in trillions of dollars. According to S&P Global, $1.070T in total new asset-backed securities were issued in 2020. 14/22

Another important loan type that asset originators finance via Tinlake is invoice financing services (factoring). In Europe alone, the size was estimated at €1.9T in 2019. Globally, the factoring market was estimated at €2.9T ($3.5T). 15/22

Tinlake has been growing at a CMGR of 73% since October 2020. For comparison, the broader #DeFi market as measured by @defipulse TVL has been growing at 27.4% since January 2020. We expect that Tinlake can grow at a 15.5% average monthly growth rate until the end of 2026. 16/22

If Tinlake maintains our projected traction and becomes successful, we expect it can originate $148B in new loans every year and achieve approximately the same amount in TVL by the end of 2026. 17/22

Based on the stage of the project, we used a 60% discount rate. Our model shows a PV of $1.36B or $3.1/CFG token. We also project ending fully diluted $CFG valuation at $14.8B or $33.6 per CFG token by the end of 2026. 18/22

Such an increase would yield an investor that purchased the token for $0.55 (@CoinList option 1 price) a multiple of 81x on the investment and distributed cash flow over the period of the next 5 years. See our investment summary below: 19/22

In conclusion, we see Centrifuge as a blockchain that will be at the forefront of real-world asset migration to blockchain. Tinlake is well-positioned to evolve into a leading platform for structured fixed-income assets. 20/22

Check out the pdf. version of the analysis under this link. All the sources are there plus all the high-quality charts. Follow me @DavidRakusan and @RBF_cap for more such deep dives. 21/22

rbf.capital/app/uploads/an…

Disclosure: @RBF_cap is an investor in @centrifuge This is not investment advice. Please do your own research and always verify the information above. 22/22