CryptoThrust X Defactor AMA
Guest: Bhairav Patel (Tech Lead)
My name is Bhairav Patel and I’m the Tech Lead for Defactor, to give you a little bit about myself, I’ve been in tech for 20 years and have been the CTO for a number of companies around the world, one of them being a FinTech that hit the Forbes FinTech 50 list back in 2016.
I’m one of the core team at Defactor and I’m really looking forward to introducing the project to all of you.
Segment 1 — Project Introduction
Q1) What is Defactor? Please give a brief introduction. What kind of problems it is going to solve?
Defactor is a platform that bridges the gap between traditional finance and DeFi. The platform itself allows companies seeking finance to tokenize their assets and obtain funding from DeFi liquidity pools.
We perform due diligence on companies seeking finance, conduct credit risk analysis on the assets they propose for funding and then funnel those assets into liquidity pools for financing. We also handle the crypto / fiat conversion which means that companies that want to access DeFi liquidity do not need to have any blockchain knowledge or infrastructure.
We also have a vibrant ecosystem that provide value added services to the companies seeking funding on our platform (think insurance, data oracles, collections etc.).
We solve a number of issues that we see that currently exist.
At a macro level we’re giving businesses an alternative to traditional finance, we’re helping nurture new business models that have sprung up from the growth of DeFi and at a micro level we’re building the tools that mean that real world assets can be deployed into DeFi liquidity pools at scale.
Q2) What do you mean by the term “The Gateway to DeFi”?
I do like this phrase.
As I’ve alluded to, companies that want to access DeFi liquidity need to have some understanding of blockchain and DeFi and to scale they will need to run their own blockchain infrastructure.
What we’re doing is providing that for those companies — acting as a Gateway to DeFi.
Once you open the door to Defactor you will have access to DeFi liquidity pools and you won’t have to worry about the underlying blockchain infrastructure.
Q3) Can you please introduce Defactor’s team?
Let me start with our Commercial Lead — Ernesto Vila
Ernesto was born in Cuba and lived most of my adult live in the US, where he founded several Technology center companies with focus on Logistics, Supply Chain Management and International Trade, one of those companies he co-Founded is Consol Freight, an early adopter of DeFi in the International Trade Finance sector.
Then we have Alejandro Gutierrez our Operations Lead
Alejandro has more than 20 years experience in the supply chain management space and lately has been working in the Trade Tech space and Supply chain finance space.
He is also a co-founder of Consol Freight and along with Ernesto were the very first to bring real world assets to DeFi, partnering with the likes of MakerDao and Centrifuge.
Next is Jenny Tsaliki, our Product Lead
Jenny has worked in FinTech for almost a decade and has a broad range of experience in developing financial products and services.
Importantly she has been involved in SME financing and fully understands the issues companies face when trying to access funding.
Then of course there is me — my blockchain journey began many years ago, I worked with a company that provided global trade and supply chain finance and back in 2016/7 were looking at ways to provide funding to SMEs using blockchain technology.
Unfortunately the tech wasn’t mature enough back then, it is now, hence Defactor.
Q4) Could you please tell us about the tokenomics & utilities of $FACTR Token?
As you point out, our token is $FACTR.
$FACTR token will be required by real world asset originators to access the Defactor services creating an increasing demand for the token as the demand for the Defactor services rises and more asset originators are onboarded.
It will also act as a governance token.
In order to participate in the governance of the Defactor ecosystem, token holders must stake their $FACTR incentivizing token holders to participate in the Defactor network.
Through community based governance $FACTR holders can influence changes to the tokenomics, the protocol fees and they can even influence the types of asset classes that can be accepted by Defactor.
One of the most unique features of our tokenomics is our Buyback-and-Make model.
Q Bonus) We would like to know about this (Buyback-and-Make model). In essence.
You’ve probably heard of buy back and burn, where burning of tokens has no positive effects for the ecosystem.
However the modern tokenomics model we use allows us to reward positive actors that exist in the ecosystem with the $FACTR tokens that we buyback
So in essence we will use fees generated to buyback tokens from the open market.
There’s more detail in our white paper
Q5) Partnership is one of the important factor of the project’s growth, could you please tell us about Defactor’s partnership(s)?
Partnerships are very important, I couldn’t agree more.
One of our most important partners is Centrifuge.
Centrifuge is a liquidity provider that finances real world assets, but not all asset originators have the infrastructure or knowledge to deal with organizations such as Centrifuge.
This is where Defactor comes in.
We simplify the process for asset originators and make it easy to access DeFi liquidity.
Also we will be helping Centrifuge to speed up their onboarding process as speedy onboarding is one of the issues facing liquidity providers at the moment.
We also have partnerships with a set of asset originators — Accelerated Payments, Lendwise, iHuddle, Black Manta that have real world assets ready for funding through the DeFi space.
We also have a new exciting partnership that will be announced next week so subscribe to our channels to listen out for that 😊
Q6) What has Defactor achieved so far? What kind of expectations can we have from Defactor in the near future? (Any event/update)
The first thing to mention is that we hit our SoftCap within 2 weeks of launching the funding round which was a significant milestone for us.
From a tech point of view we’ve been working with the first asset originators: Consol Freight and Accelerated Payments to get their systems plugged into Defactor so that we can begin the funding process and you’ll see announcements on that over the coming weeks
However, the key event I would like to highlight now is the launch of our Springpad which will occur very soon
Springpad is our way of bringing smaller asset originators onto the platform and showcasing them to our community
The Springpad will be a way for us to take businesses that are not familiar with DeFi through the funding process so they understand how things work but it also gives potential investors and members of our community to see what kinds of deals are in the pipeline
Segment 2 — Questions from Twitter
Q1) Defactor provide investors real world assets to invest in along with clarity over the details of the deals they are investing in, along with their corresponding risks. So can you tell us specifically, what are those real world assets that investors can invest with Defactor?
The first set of assets we will be bringing onto the platform is receivables i.e. invoices.
Invoices will be tokenized and then placed into pools for funding.
Also in this first phase we will also be looking to provide purchase order and inventory finance — these are the specialties of the first asset originators we’re bringing on board.
In the background we’re talking with a number of companies about financing luxury goods i.e. whiskey, wine, art and beyond that we have also been having some discussions regarding real estate and the tokenization of property.
Finally we’ll be looking at funding digital assets and NFTs.
Q2) #DEFACTOR a bridge between decentralized and traditional finance. So can I ask 1st how did the idea behind #Defactor come to life? And why did you choose “DEFACTOR” as your name? Does it represents something?
Defactor came to life through the fact that the core team has been involved in financing real world assets in DeFi for the past 18 months or so.
We experienced the difficulties of getting access to DeFi liquidity and then scaling it and so Defactor came about because we want to take our experiences and help other companies access finance easily — using the learnings that we have acquired over this period.
We also feel that DeFi needs to fund real world assets if it is to become a true alternative to traditional finance.
When it comes to the name, I have to admit I can’t remember who came up with the name 😊 but it was our attempt to bring together the words “decentralized” and “factoring”.
Q3) One of the key goal of Defactor for 2021 is launching of Springpad. So, can you tell us more about the Springpad? What is the use of Springpad in Defactor? What do you think is the impact that Springpad will bring to your platform and to community?
Yes, so we are very excited about Springpad, the idea behind it came from discussions we were having with smaller asset originators.
Those companies were looking to access DeFi liquidity but they were unsure about the process and needed to know more about how things worked.
We decided to come up with a streamlined version of our main onboarding process which would focus on smaller deals where there would be more hand-holding of the asset originators and where we could work together with them to help them understand how the funding process works by funding a pilot deal.
We then realized that this was a great opportunity for us to use the Springpad not only for smaller asset originators but to attract businesses that have new business models that are geared towards DeFi and for us to test out how different asset classes could be funded via the platform.
The way that Springpad will work is that there will be regular times of the year where we will open up the platform to smaller businesses seeking funding. Those businesses will apply via our website and we will review their submissions.
Once selected we will take them through a funding process so they understand how things work and we will showcase them to our community and potential future investors.
Ultimately the aim is that once they have been through this process they’ll be onboarded onto the full Defactor platform and can start funding their assets.
Q4) Accelerated Payments finances the end of operations to extend the 30–60 day credit to automakers. Defactor is bringing companies to DeFi, these types of transactions are the ones that can provide volume and stability to investors. What is Accelerated Payments? benefits?
OK so just to clarify here, Accelerated Payments is a company that provides invoice financing to businesses around the globe — not 30 to 60 day credit to automakers.
This is a key partnership in our opinion because Accelerated Payments is looking to grow its book and Defactor is in a position to help them increase the amount of funding they can make available to their customers.
It is also a great thing for DeFi, to have a reputable company such as Accelerated Payments bringing quality assets to DeFi that will return a good stable yield for investors.
Q5) I read that Defactor will do due diligence on the asset originators themselves and their practices thanks to asset tokenization and flow regulation to pools. But how do you maintain proper funding history and make sure limits are adhered to?
Yes we will indeed perform due diligence and KYC on asset originators — we want to ensure the quality of assets that are coming onto our platform.
With regards to funding history, that will all be maintained on-chain.
The maintenance of limits will be performed by the platform automatically.
We will work with the liquidity providers to understand their limits / covenants, they will be configured into the platform and as funding is requested we will evaluate those covenants to ensure that none of the limits are breached.
Segment 3 — Live Telegram Questions
Q1) Regarding about the current market situation is too unstable, holding back investors.. So can you give me some good reasons why I should buy your tokens in this market situation? And also why should your token holder keep holding?
This is a great question, especially given the volatility this year. We are very much in this for the long term. We do not believe in a “pump and dump”. As I mentioned before, I’ve been involved in SME finance for years and the need for finance now is as great as ever. We have a lot of experience in this area and we have a great network which is shown through our partnerships. We know there is a huge opportunity to bring DeFi to the corporate mainstream.
Q2) Do you have a Token Burning plan to increase Token value and attract Investors to invest?
no our token is based on a Buy Back and make model, The idea is for the revenue generated by the platform to be used to buyback $FACTR from exchanges and distribute to positive actors in the ecosystem (e.g., stakers, nodes). This creates buy pressure on the token while maintaining the benefits of continued issuance and rewards for positive ecosystem actors. This ensures that there is always an incentive to generate revenue and growth for the system while maintaining the benefits of a capped token supply. This is a key value accrual mechanism for the token holders and the ecosystem as a whole.
Q3) So many projects just like to speak about the “long term vision and mission” but what are your short terms objectives? What are you focusing right now?
Our short term objectives right now are launching our Springpad process and our token listing. These should both be coming in October. The Springpad will be a way for us to take businesses that are not familiar with DeFi through the asset funding process so they understand how things work. The token listing is also very important, so stayed tuned so you can hear when we set the date!
Q4) What are your plans on Global adoption? What is the next goal you want to achieve? Where will your main development market be?
We are initially concentrating on asset originators located in Europe and the US but the funding they provide is global. We are also actively in talk with asset originators in Asia but those are in the early stages. Our platform is global, we will welcome asset originators from all countries but we will have a steady and controlled rollout.
Q5) NFT is really a hot topic in the cryptocurrency market now. So how is your project planning to develop NFT then how is your project planning to integrate it with DeFi?
Yes, NFTs are very hot right now and they form the basis of our funding. We will be creating NFTs from real world assets i.e. invoices will be minted into NFTs and funded. When it comes to digital assets, those are most certainly on our roadmap and as I mentioned, they will be one of the asset classes we will be looking to bring on board.