AMA with Defactor
On the 28th of March, 2022 at 01:00 PM UTC, Decentralized Club had the honor of hosting [James], [Ernesto Vila] from Defactor for an Ask-Me-Anything session on their Telegram page with a community of over 70,000 people. It was hosted by [Ella].
The session was divided into three segments. Introductions were made in Segment 1, questions from the Twitter community were answered in Segment 2, and live questions from the community members in attendance were answered in Segment 3.
If you missed this event and would like to know what a Defactor is all about, you can find a recap of the interview here. Information here should be researched and should not be taken as investment or financial advice. Also note that slight edits have been made for clarity, and links in this recap lead to images, documents, or other media.
Segment 1 – Introduction
Hi Everyone! Hope you guys doing well😊
Today i am back with another AMA session with the Decentralized Club.
Hi, thank you for having us
My name is Ella and I will be hosting Defactor in this session.
Let's welcome our guests
Heyy Guyss, How are you?
Hi everyone, nice to be here today
Thank you, glad to be here!
You’re welcome to Decentralized Club ! It’s our pleasure to have you !
How's your day going so far?
All good here in Dublin
Very busy and that is always good
I am in Barcelona at the moment
ohh you guyss joined from dublin and barcelona🤩
can you guyss introduce yourself to the community and your roles at defactor?
Hello everyone, my name is [James] Tolan and I'm the community manager
Mi my name is Ernesto Vila, I am the commercial lead and a co-Founder of Defactor, my background is in logistics, supply chain and trade finance.
Let's dive into session!😉
Starting with our first segment:
Q1. Can you give us a brief description of Defactor ?
I'll take this one
Defactor is the bridge that brings traditional businesses to the world of DeFi. The platform allows companies seeking finance to tokenize their assets and use them as collateral to obtain funding from DeFi liquidity pools
Kindly type"✅" after you are done answering!
To put it simply, we are helping small businesses receive funding backed off their assets to grow and develop their businesses.
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.
ohh nice! 🔥 it's a good thing
Q2. What are the major products / features that benefit the user on your platform?
I can answer that
suree☺️! please go ahead
We give companies seeking funding access an alternative source of liquidity, DeFi liquidity. Companies receive finance backed off their real-world assets. The funds received can be used to expand and develop their business.
In addition we are able to put them in touch with communities that normally they cannot tap into and of course as token holders the asset originators are able to participate in the governance of the project
Q3. What makes Defactor different from its competitors?
Thats a good question
The real-world asset space in DeFi is young. It is a small market, but it is expected to explode over the coming years as more mainstream businesses start tapping into DeFi liquidity. The Defactor team’s experience and network is what will set us apart.
Two of our co-founders, Erenesto and Alejandro, were some of the very first people to extract funds from DeFi liquidity on Centrifuge. Alejandro and Ernesto have experienced and understand the difficulty of accessing DeFi liquidity. From these experiences they’ve set out to create a smooth and seamless funding process for traditional businesses, which will accelerate the onboarding process of real-world assets to DeFi.
yaaa! correct, this market is expected to grow in the coming year!🎉
Thanks for the reference
Speaking of Centrifuge, Defactor’s network of partners is another factor that will give us a competitive advantage. We have partnerships with important players such as Centrifuge, Algorand and Amplify Protocol. Centrifuge and Amplify will be key players in providing liquidity, and we will make the liquidity accessible to traditional businesses.
Through our partnership with Algorand we have received an ALGO grant, which will be used to build the Defactor services on the Algorand blockchain and tap into liquidity available in their ecosystem.
Ernesto, it's a great initiative taken by you too☺️
Lots of hard work as well
Yes especially the real-world asset space as more traditional businesses enter DeFi!
okayyy , moving on to the next question!
Q4. How can a user acquire the $FACTR token and what are the benefits of holding it?
The $FACTR token is the key that unlocks the platform, asset originators that are seeking funding need to stake FACTR tokens in order to gain access to the funding smart contracts
Our tokenomics will use a Buyback-and-Make model that allows us to increase buy pressure on the token using the fees that we collect from the funding that flows through the platform.
The token will also act as a governance token that will allow the community to influence decisions made in the project.
Q5. Can you tell us what the next major priorities are for Defactor in 2022?
Springpad is one of the main focuses for the Defactor as it allows SMEs to test DeFi funding and we’ve just successfully completed the first round of the Springpad program. Applications for the second round of Springpad are now open.
Antelope DAO and Fivana are two of the first round Springpad participants that have bought and fully staked their $FACTR tokens. Antelope DAO have had their funding transaction fully completed while the Fivana funding transaction is underway.
We are also looking to onboard Accelerated Payments in the coming months. They will be the second major asset originator to be fully onboarded to the Defactor platform, with the first being ConsolFreight.
As mentioned earlier the Algorand grant will also be a major focus in Q2 and Q3 of this year which will be really exciting for the Defactor team and community.
Looking forward to it🤩
With this, we have came to an end of segment 1!
Time to take up some interesting questions from our Twitter community!😁
Are you guyssss readyy ?😉
Indeed, looking forward to it
Here we go with the first question
Q1.What advantages does Defactor have to become the world leader in decentralized financing? What allows you to obtain so much liquidity to constantly finance large and small companies? What allows you to finance companies around the world to support them in their economic growth?
I'll answer this one
suree! Please go ahead Ernesto😊
One purpose of Defactor is to give traditional businesses access to DeFi but another goal for us is to bring to investors deals and opportunities they would not normally find through the traditional markets.
We are truly looking to democratize access to funding and investments. As we are chain agnostic, we can work with liquidity pools on different chains with their own communities to bring our asset originators access to consistent finance.We are also seeing growing interest from institutional investors that see the DeFi space as an alternative place to put their money and earn yield. Having a wide range of investors also means that they have different investment appetites and that means we can offer funding to a wide range of companies based on those appetites
Q2. Many businesses have discovered Defactor as a channel for obtaining financial services on business models in which traditional banks does not engage. The traditional financial system has become obsolete. What is Defactor's business plan that makes it such an appealing platform?
I got this one!
We are onboarding Asset Originators that take different approaches to lending criteria where banks only analyze credit worthiness and insurability. Our originators are using different forms of collateral to mitigate risk, from cargo onboard a ship to whiskey maturing on a barrel.
This out of the box approach is what promotes innovation that creates new business models. We are closely studying the combination of crypto assets and real world assets as a form of collateral. This could be applied to Real Estate lending and many other sectors. In the future we plan to expand into other sectors to onboard various asset types. The community will have a say which asset types we will explore and accept through the $FACTR governance system.
Q3. RWA originators can access and manage their DeFi procedures using the Defactor platform's integration and risk management features. What tools are you referring to? How could the DeFi procedure be improved if only the RWA creator had access to it?
We want to take away the complexity of DeFi for traditional businesses and we do this by providing them with easy to use interfaces and traditional means for accessing our platform.We have portals and APIs that allow asset originators to upload assets and through the portals they are able to request and keep a track of funding. On top of that the system itself maintains the covenants set by the different liquidity pools so they don’t need to be tracked by the asset originator In other words, the Assets originators are experts on the asset class they work in; we let them use their expertise and process to bring assets to the protocol while Defactor monitors and enforces covenants and the multiple risk factors to help the originators keep a good balance on their portfolio.
agree! interface takes the major role in any product!
Greattt! Your project is interesting🤩, i must say
Q4. Defactor is built on the ETH network because its liquidity suppliers are also on the SSID network. But, given how inconvenient ETH fees are and how they can harm investors in the long run, do you have plans to expand to other, more rate-friendly chains?
Defactor is designed to be chain agnostic, as we work with different liquidity providers, we will be bridging across to different chains, we started working with Centrifuge, whose Tinlake protocol is on Ethereum, however they recently won a Polkadot parachain auction. As they move across to Polkadot, we will be following them there to maintain access to their liquidity.
Our own Springpad is built on BNB chain and we are currently exploring the development of pools on Algorand. Other partners we are talking to are using Polygon and other rate-friendly chains.
Moving on to the last one from Twitter:
Q5. Traditional finance has been a source of frustration for many in the crypto community. When you say #DEFACTOR is a link between traditional & decentralized finance. How do you combine the two features? How can you put a creative idea into action to attract users?
Defactor bridges traditional businesses and decentralized finance because it allows traditional companies to easily tap into DeFi liquidity.
DeFi is a new space with high barriers to entry. Currently it is very difficult to use for SMEs coming from the traditional sector, as they lack the knowledge and infrastructure to deal with blockchain technology. They need help. Defactor simplifies the process by dramatically reducing their interaction with the blockchain, allowing SMEs access to DeFi and therefore bridging traditional businesses and decentralized finance. Our ability to make DeFi liquidity accessible is what will attract users and clients.
Completely agree with you!
Here Segment 2 Ended!
Time to take up some questions for segment 3 from our live audience! Community people be readyyy to shoot your questions😉
Please pick five original questions to answer.
Try to ignore generic, vague, and copy-paste questions 😊
AMA Rules for the community
Dear community, as a measure to deter bots and reward hunters, please include the guest’s full name in your questions so the guest can tell original questions apart!
DO NOT TAG THE GUEST
---Chat was then opened for the live community to send in their questions---
Segment 3 - Live Questions
Q1. One purpose of Defactor is to give traditional businesses access to DeFi but another goal for us is to bring to investors deals and opportunities they would not normally find through the traditional markets".
Can you tell us about this deals and opportunities you talked about here,
Tell us a few of these opportunities please [Carl johnson]
Hi Carl, Yes we have worked on numerous deals where SMEs are selling COVID test or related products to the Government, where the government will only pay 30 days after they recieved and inspect the goods. This is a NON insurable transaction because technically the government wont go bankrupted, because there is no insurance traditional banking wont finance those transactions. Because our Asset Originator Consol Freight handles the financing and the logistics there is certainty that the good will arrive in the intended from therefore accepted and paid as expected.
That is just one sample of thinking out of the box and using other meas to reduce the risk
Q2.How has Graph benefitted Defactor, in what way?
The partnership between Defactor will be important for creating on-chain credit risk scores for asset originators. The graph will be able to index the history of transactions for a specific asset originator. We have actually received a grant from the Graph to work on this.
I currently saw that they have their Springpad program now accepting applications until March 31, 2022. But what are the steps to secure financing for my business or company? I still have time to register, can't I request more time? Will they have more programs in the future?
This deadline has been extended until the 30th of April! So you will have plenty time to apply. You can find a link to the Springpad website here.
You mentioned that "Applications for the second round of Springpad are now open" how can SMEs go about the application ? What are the processes involved in the application?
Asset Originators can apply to the Springpad thought this link: https://springpad.defactor.com/
The transactions must be less than $50K in value and we analyze their de-risking proccess and the possibility of scaling the proccess into a larger pool. That are the basics considerations when applying
Why did DeFactor decide to start on the Ethereum network? What advantages does this network offer to your platform? Will you implement more blockchain networks like BSC or Solana?
Defactor started on Ethereum because it has the largest DeFi ecosystem and it allowed us to tap into the Centrifuge ecosystem. We have already expanded to BSC and the Springpad system has been built on the Binance Chain. We also have plans to expand to the Algorand blockchain with a grant we received from Algorand. We currently have no plans for Solana, but we won't rule it out. We will follow DeFi and the liquidity!
Since NFTs are very popular. Can you tell us if DeFactor plans to implement them in their platform? If so, how useful will they be? On which network would you mint them?
Hi Tom, we use NFTs in many forms, currently every asset used as collateral is represented on chain as an NFT containing all the values of the underlaying asset. But we plan to use other kind of NFTs such as virtual lands, or Intelectual property or sport contracts as collateral to advance funding to the owner.
OKaaaayyy! Greeattt! you both have answered 7 questions🙈
Andddd its a wrap 🎉🥳
Wow that was a lot in very little time, I must say, very good questions from this great community
Don't forget to follow us on Twitter and join Telegram to stay up to date!😎
Thank you guyss for your time 😊
Your answers were Excelent! Thankyouu for choosing us!
Cheers 🥂 to you and your team at Defactor for their time and effort in making this project a success!
And for anyone looking to apply for the Springpad program you can do so through the Springpad website!
Thank you very much🤝