What is Credefi? All You Need to Know About CREDI
In today’s fast-paced economy, small and medium-sized enterprises (SMEs) often struggle to secure fair and accessible lending solutions due to stringent banking regulations and high-interest rates. This financial gap hinders their growth and innovation potential, creating a significant need for alternative funding platforms. Credefi addresses this challenge by providing a decentralized finance solution, connecting borrowers and lenders through blockchain technology. This approach ensures transparent, secure, and efficient lending processes, empowering SMEs to access the capital they need to thrive in the competitive market.
What is Credefi (CREDI)?
Credefi was founded in December 2021 by Ivo Grigorov and Valentin Dimitrov, seasoned finance professionals with extensive experience in traditional and decentralized finance. The platform connects crypto lenders with SME borrowers, offering loans backed by real-world assets such as real estate and future receivables. Credefi aims to bridge the gap between Traditional Finance (TradFi) and Decentralized Finance (DeFi), addressing the financing needs of SMEs in the EU, where 99% of businesses fall into this category. By utilizing a three-layer protection mechanism, Credefi ensures the security of DeFi lenders’ investments in the real economy.
In 2023, Credefi achieved significant milestones, including regulatory approval as a Virtual Asset Service Provider (VASP) and a strategic partnership with XRPL. This partnership enabled Credefi to extend its services to the XRPL network, introducing an interest-bearing product on Gatehub EUR, Gatehub USD, and Bitstamp EUR stablecoins. Additionally, Credefi launched its Autonomous Earning product, leveraging advanced risk-class methodologies to optimize returns by managing risk intelligently.
In 2024, Credefi continues to expand its offerings with innovative products and features. The platform has introduced ModuleX Round 2, facilitating the minting of $xCREDI tokens after a six-month incubation period. The P2P Lending product has been released, promoting financial inclusivity by connecting investors and borrowers directly. Other new features include bank transfer capabilities, an automated portfolio product, in-house $CREDI staking, and the introduction of NFT bonds.
Credefi’s mission is to provide accessible and secure lending solutions to SMEs while integrating TradFi and DeFi. Through its innovative products and strategic partnerships, Credefi aims to revolutionize the alternative financing sector, offering stable and predictable returns for lenders and addressing the financial needs of SMEs across Europe.
How Does Credefi Work? Lending System and Services
Credefi is an alternative lending platform connecting crypto lenders with small and medium-sized enterprises (SMEs) seeking financing. The platform’s lending system is designed to offer stable and predictable returns to lenders while providing SMEs with the funds they need to grow and thrive. Lenders can invest in various lending products, such as portfolios of loans, single loan exposures, and corporate bonds backed by real-world assets like real estate and future receivables.
For lenders, the process is straightforward and begins with registering on the Credefi platform. Once registered, lenders undergo a simple KYC process and then connect their wallets or create a new one on the platform. They can then choose from a range of lending products based on risk tolerance and desired returns. The platform provides detailed risk assessments and credit score data for all lending opportunities, ensuring lenders have the information needed to make informed decisions.
Credefi’s lending system is divided into three stages. The first stage involves portfolio lending, where stablecoins are lent to different portfolios categorized by risk levels. These portfolios can yield an annual percentage yield (APY) of 10% and above, depending on the associated risks. The platform ensures transparency by providing credit scores and risk assessments validated by Experian, a major credit scoring agency.
The second stage focuses on project-based peer-to-peer (P2P) lending. This stage leverages the decentralized nature of blockchain technology to connect lenders and borrowers directly, allowing for a more liberalized lending and borrowing process. In this phase, Credefi also offers zero-collateral loans on a case-by-case basis, further expanding the range of financing solutions available to SMEs.
The final stage of Credefi’s lending system is trade finance. In this stage, Credefi combines traditional banking instruments with decentralized finance (DeFi) to offer a broader range of services. This includes facilitating trade finance deals where lenders and borrowers can underwrite Letters of Credit or Letters of Guarantee. This integration of TradFi and DeFi helps Credefi offer comprehensive financing solutions that cater to the diverse needs of SMEs.
Borrowers on the Credefi platform benefit from flexible financing solutions tailored to their specific needs. All borrowers must provide real-world assets as collateral and undergo Credefi’s proprietary risk-scoring process. This thorough vetting process ensures that the platform maintains high security and reliability, protecting the interests of lenders and borrowers.
One of Credefi’s standout features is its multi-layered security mechanism. By accepting real-world assets as collateral, the platform mitigates the risk of volatility typically associated with crypto investments. This approach provides a stable and secure environment for both lenders and borrowers.
Source: credefi.finance
Credefi’s lending system offers a robust framework for connecting crypto lenders with SME borrowers, providing secure and profitable lending opportunities backed by real-world assets. This innovative approach bridges the gap between TradFi and DeFi and addresses the financing needs of a significant portion of the EU economy. Next, let’s explore the various services that Credefi offers to enhance the user experience and broaden its impact.
Services
Credefi offers services to bridge the gap between traditional finance (TradFi) and decentralized finance (DeFi), providing innovative and secure lending solutions for lenders and borrowers. The platform is dedicated to seamlessly integrating these two worlds, offering diverse investment opportunities catering to various risk appetites and financial goals.
One of the standout services offered by Credefi is Autonomous Earning. This financial product is ideal for cryptocurrency investors seeking stable returns independent of the volatile crypto market. Autonomous Earning ensures predictable returns by utilizing stablecoins to fund real-world economic activities, particularly targeting SMEs within the EU. Each borrower undergoes a rigorous risk assessment process validated by Experian, a global leader in credit scoring. This innovative approach merges traditional and crypto finance, offering a secure, growth-optimized investment platform. Investors benefit from a stable investment environment, mitigated market fluctuations, and the opportunity to support SME growth in the EU.
Source: xrpl.credefi.finance
Another notable service is FinCorp Bonds, set to launch in Q1 2024. This product is tailored for renowned financial institutions with proven track records and solid portfolios. These institutions can apply for bond issuance through Credefi to receive liquidity for their lending activities. Each bond issuance is backed by part of the institution’s active credit portfolios, which undergo a stringent credit risk assessment by Experian. Credefi’s corporate bonds are plain vanilla with a clear interest-bearing feature and fixed maturity, democratizing access to debt instruments and further decentralizing digital assets within the real-world financial sector. Bonds are issued as NFT tranches, which can be fractionalized and traded on Credefi’s platform, allowing users to claim their returns seamlessly.
P2B Crowdfund Lending, expected to launch in Q2 2024, leverages the decentralized capabilities of blockchain technology to offer direct peer-to-peer finance. This product connects lenders and borrowers worldwide, facilitating a liberalized process of lending and borrowing. Credefi’s P2B crowdlending allows users to directly lend to SMEs or individuals, browsing a list of loan listings with varying risk and yield profiles. This product not only offers attractive returns but also provides the opportunity for lenders to support businesses they believe in. Additionally, the platform can offer zero-collateral loans on a case-by-case basis, further expanding the lending opportunities available to users.
Source: xrpl.credefi.finance
In conclusion, Credefi’s range of services, including Autonomous Earning, FinCorp Bonds, and P2B Crowdfund Lending, exemplifies the platform’s commitment to integrating traditional and decentralized finance. These services provide secure, stable, and profitable investment opportunities while supporting the growth and success of SMEs. By offering innovative financial products and leveraging blockchain technology, Credefi is poised to revolutionize the alternative lending sector.
Credefi Use Cases
Credefi provides a range of use cases that leverage the synergy between traditional finance (TradFi) and decentralized finance (DeFi) to offer innovative financial solutions. By connecting crypto lenders with SME borrowers, Credefi enables more efficient and secure financial transactions that cater to various needs and preferences. Here are some prominent use cases:
- SME Financing: Small and medium-sized enterprises (SMEs) often face significant challenges in accessing traditional financing options due to stringent requirements and lengthy approval processes. Credefi addresses this gap by providing SMEs with flexible and accessible loan options. Borrowers can leverage real-world assets as collateral, ensuring they receive the necessary funds to grow and sustain their businesses. This helps SMEs thrive and contribute to the economy while lenders benefit from stable and predictable investment returns.
- Alternative Investments for Crypto Holders: Cryptocurrency investors looking to diversify their portfolios can use Credefi’s platform to invest in real-world loans. By converting their crypto holdings into stablecoins, investors can lend to SMEs and earn attractive returns, which are not correlated with the volatile crypto market. This offers a more stable and secure investment option, reducing overall portfolio risk and providing consistent income.
- Institutional Lending Solutions: Financial institutions seeking liquidity for their lending activities can issue corporate bonds through Credefi. These bonds, backed by part of the institutions’ active credit portfolios, provide a secure and transparent way to raise funds. Blockchain technology ensures that these bonds can be traded as NFTs, enhancing liquidity and accessibility for investors. This innovative approach helps financial institutions access the capital they need while offering investors new avenues for earning returns.
In conclusion, Credefi’s use cases demonstrate the platform’s versatility and effectiveness in bridging the gap between traditional and decentralized finance. By providing innovative solutions for SMEs, crypto investors, and financial institutions, Credefi is revolutionizing the way financial transactions are conducted, promoting growth, stability, and efficiency in the financial sector.
What is the CREDI Coin?
CREDI is Credefi’s native utility token for transactions and rewards within its ecosystem. Its maximum supply is capped at 1 billion units, of which 748.6 million (74.86%) are already in circulation (June 2024).
The CREDI token is an integral part of the Credefi ecosystem, designed to serve multiple purposes. Primarily, CREDI provides additional security and yield boost opportunities for loans on the platform through the Module X security module. It is also used for collateral protection insurance, enhancing the safety and stability of investments. CREDI is distributed via private and public token sales and can later be traded on DEXs and CEXs. Lenders receive CREDI as rewards based on their loan contributions, while borrowers can potentially obtain zero-collateral loans by holding CREDI.
Credefi’s token economy includes both CREDI and xCREDI tokens. CREDI is earned through platform activity and used for rewards and security. It has a perpetual inflation rate of 5% per year, distributed among platform participants. Users can purchase CREDI from DEXs or CEXs, or earn it by providing lending liquidity, token liquidity, or staking xCREDI LP tokens. Once acquired, CREDI can be sold, provided as liquidity on DEXs, or converted to xCREDI.
xCREDI is created by depositing CREDI in the Module X security module and serves as Credefi’s profit-sharing and governance token. It can be traded on DEXs, used in governance participation, or provided as liquidity to the xCREDI/USDT pair on UniSwap. Additionally, a portion of all fees and interest collected on the platform will fund a buyback and liquidity provision program for xCREDI, creating deflationary pressure.
The CREDI token allocation includes 21% for the token sale, 25% for ecosystem incentives, 14% for reserve, 10% for liquidity, 5% for partnerships and advisors, and 25% for the team. This strategic distribution aims to ensure a balanced and sustainable growth of the Credefi ecosystem.
Source: credefi tokenomics paper
Credefi Main Features
Credefi offers a robust suite of features to enhance the decentralized finance ecosystem’s lending and borrowing experience. These features include non-custodial wallets, on/off ramp functionality, advanced credit risk assessment, and real-world asset (RWA) collateral management.
Non-Custodial Wallets
Non-custodial wallets provide users with heightened security and control over their digital assets by allowing them to manage their private keys. Unlike custodial wallets, which are controlled by centralized entities, non-custodial wallets ensure that users have complete autonomy over their funds. Credefi integrates non-custodial wallet functionality seamlessly into its platform, enabling users to create a new wallet or connect an existing one, such as Metamask or WalletConnect. This integration enhances security and simplifies the onboarding process, fostering greater adoption of blockchain technology.
On/Off Ramp
Credefi offers an intuitive on/off ramp feature to streamline lending participation. This allows users to purchase stablecoins and engage in lending easily, then quickly cash their earnings into the real economy. This functionality is crucial for users new to DeFi, as it eliminates the complexities typically associated with purchasing stablecoins and participating in lending. By simplifying these processes, Credefi is making DeFi more accessible to a broader audience, driving the widespread adoption of blockchain technology and decentralized finance.
Credit Risk Assessment
Credefi strongly emphasizes robust credit risk assessment to ensure financial stability and security. Using data validated by Experian, Credefi evaluates each borrower’s qualitative and quantitative aspects. Qualitative assessments include due diligence, KYC/KYB, and web scoring, providing a comprehensive company overview. Quantitative assessments involve empirical analysis of borrower characteristics and historical data using applicational and behavioral scorecards. This rigorous process enables Credefi to predict repayment probabilities and determine appropriate risk premiums, facilitating informed lending decisions.
RWA Collateral
A distinctive feature of Credefi is its use of Real-World Assets (RWA) as collateral to secure loans. This practice mitigates risk by leveraging traditional finance methods within the DeFi space. Credefi partners with established financial institutions to administer these collaterals, ensuring legal rights and due diligence. In the event of a loan default, the collateral administrator liquidates the asset and refunds the principal amount to lenders. This process involves initial screening, collateral valuation, and legal documentation, providing a comprehensive security framework for all parties involved.
Integration with XRP Ledger
Credefi Finance has integrated with the XRP Ledger (XRPL), enhancing its DeFi offerings with innovative real-world lending products. This partnership leverages XRPL’s decentralized, efficient blockchain to provide secure financial solutions. The integration includes short-term bridge liquidity loans for European SMEs, backed by thorough risk assessments using Credefi’s bespoke risk engine and Experian’s attestation. This step strengthens Credefi’s commitment to pioneering secure, innovative financial solutions for users.
In conclusion, Credefi’s innovative features create a secure, user-friendly platform that bridges traditional and decentralized finance. These features collectively drive the mass adoption of blockchain technology, offering a seamless and secure lending experience.
Source: credefi.finance
Is CREDI a Good Investment?
CREDI presents a promising investment due to its innovative approach of combining traditional finance with DeFi, offering stable returns through real-world asset collateralization. This utility token enhances security for loans and provides additional yield opportunities, making it useful for future financial stability and growth. However, potential risks include regulatory changes and market volatility, which could affect its adoption and value. Additionally, the success of the platform heavily relies on user trust and widespread adoption, which may be challenging in the competitive DeFi landscape.
How to Own CREDI?
To own CREDI, you can use the services of a centralized crypto exchange. Start by creating a Gate.io account and get it verified and funded. Then, you are ready to go through the steps to buy CREDI.
News on Credefi
According to what was announced on Credefi’s official X channel on May 22, 2024, Module X has been successfully relaunched as a permanent feature on Credefi Finance Platform 2.0. With a 6-month staking period, CREDI tokens will be burnt and converted to xCREDI at decreasing rates. xCREDI holders gain governance participation, bi-annual profit sharing, and instant ROI. Additionally, CREDI and xCREDI can remunerate lending liquidity providers in case of loan defaults.
Take Action on CREDI
Check out CREDI price today, and start trading your favorite currency pairs.
Related articles
What Are Altcoins?
What Is Ethereum 2.0? Understanding The Merge
What Is Dogecoin?
What is Credefi? All You Need to Know About CREDI
What is Credefi (CREDI)?
How Does Credefi Work? Lending System and Services
Credefi Use Cases
What is the CREDI Coin?
Credefi Main Features
Is CREDI a Good Investment?
How to Own CREDI?
News on Credefi
Take Action on CREDI
In today’s fast-paced economy, small and medium-sized enterprises (SMEs) often struggle to secure fair and accessible lending solutions due to stringent banking regulations and high-interest rates. This financial gap hinders their growth and innovation potential, creating a significant need for alternative funding platforms. Credefi addresses this challenge by providing a decentralized finance solution, connecting borrowers and lenders through blockchain technology. This approach ensures transparent, secure, and efficient lending processes, empowering SMEs to access the capital they need to thrive in the competitive market.
What is Credefi (CREDI)?
Credefi was founded in December 2021 by Ivo Grigorov and Valentin Dimitrov, seasoned finance professionals with extensive experience in traditional and decentralized finance. The platform connects crypto lenders with SME borrowers, offering loans backed by real-world assets such as real estate and future receivables. Credefi aims to bridge the gap between Traditional Finance (TradFi) and Decentralized Finance (DeFi), addressing the financing needs of SMEs in the EU, where 99% of businesses fall into this category. By utilizing a three-layer protection mechanism, Credefi ensures the security of DeFi lenders’ investments in the real economy.
In 2023, Credefi achieved significant milestones, including regulatory approval as a Virtual Asset Service Provider (VASP) and a strategic partnership with XRPL. This partnership enabled Credefi to extend its services to the XRPL network, introducing an interest-bearing product on Gatehub EUR, Gatehub USD, and Bitstamp EUR stablecoins. Additionally, Credefi launched its Autonomous Earning product, leveraging advanced risk-class methodologies to optimize returns by managing risk intelligently.
In 2024, Credefi continues to expand its offerings with innovative products and features. The platform has introduced ModuleX Round 2, facilitating the minting of $xCREDI tokens after a six-month incubation period. The P2P Lending product has been released, promoting financial inclusivity by connecting investors and borrowers directly. Other new features include bank transfer capabilities, an automated portfolio product, in-house $CREDI staking, and the introduction of NFT bonds.
Credefi’s mission is to provide accessible and secure lending solutions to SMEs while integrating TradFi and DeFi. Through its innovative products and strategic partnerships, Credefi aims to revolutionize the alternative financing sector, offering stable and predictable returns for lenders and addressing the financial needs of SMEs across Europe.
How Does Credefi Work? Lending System and Services
Credefi is an alternative lending platform connecting crypto lenders with small and medium-sized enterprises (SMEs) seeking financing. The platform’s lending system is designed to offer stable and predictable returns to lenders while providing SMEs with the funds they need to grow and thrive. Lenders can invest in various lending products, such as portfolios of loans, single loan exposures, and corporate bonds backed by real-world assets like real estate and future receivables.
For lenders, the process is straightforward and begins with registering on the Credefi platform. Once registered, lenders undergo a simple KYC process and then connect their wallets or create a new one on the platform. They can then choose from a range of lending products based on risk tolerance and desired returns. The platform provides detailed risk assessments and credit score data for all lending opportunities, ensuring lenders have the information needed to make informed decisions.
Credefi’s lending system is divided into three stages. The first stage involves portfolio lending, where stablecoins are lent to different portfolios categorized by risk levels. These portfolios can yield an annual percentage yield (APY) of 10% and above, depending on the associated risks. The platform ensures transparency by providing credit scores and risk assessments validated by Experian, a major credit scoring agency.
The second stage focuses on project-based peer-to-peer (P2P) lending. This stage leverages the decentralized nature of blockchain technology to connect lenders and borrowers directly, allowing for a more liberalized lending and borrowing process. In this phase, Credefi also offers zero-collateral loans on a case-by-case basis, further expanding the range of financing solutions available to SMEs.
The final stage of Credefi’s lending system is trade finance. In this stage, Credefi combines traditional banking instruments with decentralized finance (DeFi) to offer a broader range of services. This includes facilitating trade finance deals where lenders and borrowers can underwrite Letters of Credit or Letters of Guarantee. This integration of TradFi and DeFi helps Credefi offer comprehensive financing solutions that cater to the diverse needs of SMEs.
Borrowers on the Credefi platform benefit from flexible financing solutions tailored to their specific needs. All borrowers must provide real-world assets as collateral and undergo Credefi’s proprietary risk-scoring process. This thorough vetting process ensures that the platform maintains high security and reliability, protecting the interests of lenders and borrowers.
One of Credefi’s standout features is its multi-layered security mechanism. By accepting real-world assets as collateral, the platform mitigates the risk of volatility typically associated with crypto investments. This approach provides a stable and secure environment for both lenders and borrowers.
Source: credefi.finance
Credefi’s lending system offers a robust framework for connecting crypto lenders with SME borrowers, providing secure and profitable lending opportunities backed by real-world assets. This innovative approach bridges the gap between TradFi and DeFi and addresses the financing needs of a significant portion of the EU economy. Next, let’s explore the various services that Credefi offers to enhance the user experience and broaden its impact.
Services
Credefi offers services to bridge the gap between traditional finance (TradFi) and decentralized finance (DeFi), providing innovative and secure lending solutions for lenders and borrowers. The platform is dedicated to seamlessly integrating these two worlds, offering diverse investment opportunities catering to various risk appetites and financial goals.
One of the standout services offered by Credefi is Autonomous Earning. This financial product is ideal for cryptocurrency investors seeking stable returns independent of the volatile crypto market. Autonomous Earning ensures predictable returns by utilizing stablecoins to fund real-world economic activities, particularly targeting SMEs within the EU. Each borrower undergoes a rigorous risk assessment process validated by Experian, a global leader in credit scoring. This innovative approach merges traditional and crypto finance, offering a secure, growth-optimized investment platform. Investors benefit from a stable investment environment, mitigated market fluctuations, and the opportunity to support SME growth in the EU.
Source: xrpl.credefi.finance
Another notable service is FinCorp Bonds, set to launch in Q1 2024. This product is tailored for renowned financial institutions with proven track records and solid portfolios. These institutions can apply for bond issuance through Credefi to receive liquidity for their lending activities. Each bond issuance is backed by part of the institution’s active credit portfolios, which undergo a stringent credit risk assessment by Experian. Credefi’s corporate bonds are plain vanilla with a clear interest-bearing feature and fixed maturity, democratizing access to debt instruments and further decentralizing digital assets within the real-world financial sector. Bonds are issued as NFT tranches, which can be fractionalized and traded on Credefi’s platform, allowing users to claim their returns seamlessly.
P2B Crowdfund Lending, expected to launch in Q2 2024, leverages the decentralized capabilities of blockchain technology to offer direct peer-to-peer finance. This product connects lenders and borrowers worldwide, facilitating a liberalized process of lending and borrowing. Credefi’s P2B crowdlending allows users to directly lend to SMEs or individuals, browsing a list of loan listings with varying risk and yield profiles. This product not only offers attractive returns but also provides the opportunity for lenders to support businesses they believe in. Additionally, the platform can offer zero-collateral loans on a case-by-case basis, further expanding the lending opportunities available to users.
Source: xrpl.credefi.finance
In conclusion, Credefi’s range of services, including Autonomous Earning, FinCorp Bonds, and P2B Crowdfund Lending, exemplifies the platform’s commitment to integrating traditional and decentralized finance. These services provide secure, stable, and profitable investment opportunities while supporting the growth and success of SMEs. By offering innovative financial products and leveraging blockchain technology, Credefi is poised to revolutionize the alternative lending sector.
Credefi Use Cases
Credefi provides a range of use cases that leverage the synergy between traditional finance (TradFi) and decentralized finance (DeFi) to offer innovative financial solutions. By connecting crypto lenders with SME borrowers, Credefi enables more efficient and secure financial transactions that cater to various needs and preferences. Here are some prominent use cases:
- SME Financing: Small and medium-sized enterprises (SMEs) often face significant challenges in accessing traditional financing options due to stringent requirements and lengthy approval processes. Credefi addresses this gap by providing SMEs with flexible and accessible loan options. Borrowers can leverage real-world assets as collateral, ensuring they receive the necessary funds to grow and sustain their businesses. This helps SMEs thrive and contribute to the economy while lenders benefit from stable and predictable investment returns.
- Alternative Investments for Crypto Holders: Cryptocurrency investors looking to diversify their portfolios can use Credefi’s platform to invest in real-world loans. By converting their crypto holdings into stablecoins, investors can lend to SMEs and earn attractive returns, which are not correlated with the volatile crypto market. This offers a more stable and secure investment option, reducing overall portfolio risk and providing consistent income.
- Institutional Lending Solutions: Financial institutions seeking liquidity for their lending activities can issue corporate bonds through Credefi. These bonds, backed by part of the institutions’ active credit portfolios, provide a secure and transparent way to raise funds. Blockchain technology ensures that these bonds can be traded as NFTs, enhancing liquidity and accessibility for investors. This innovative approach helps financial institutions access the capital they need while offering investors new avenues for earning returns.
In conclusion, Credefi’s use cases demonstrate the platform’s versatility and effectiveness in bridging the gap between traditional and decentralized finance. By providing innovative solutions for SMEs, crypto investors, and financial institutions, Credefi is revolutionizing the way financial transactions are conducted, promoting growth, stability, and efficiency in the financial sector.
What is the CREDI Coin?
CREDI is Credefi’s native utility token for transactions and rewards within its ecosystem. Its maximum supply is capped at 1 billion units, of which 748.6 million (74.86%) are already in circulation (June 2024).
The CREDI token is an integral part of the Credefi ecosystem, designed to serve multiple purposes. Primarily, CREDI provides additional security and yield boost opportunities for loans on the platform through the Module X security module. It is also used for collateral protection insurance, enhancing the safety and stability of investments. CREDI is distributed via private and public token sales and can later be traded on DEXs and CEXs. Lenders receive CREDI as rewards based on their loan contributions, while borrowers can potentially obtain zero-collateral loans by holding CREDI.
Credefi’s token economy includes both CREDI and xCREDI tokens. CREDI is earned through platform activity and used for rewards and security. It has a perpetual inflation rate of 5% per year, distributed among platform participants. Users can purchase CREDI from DEXs or CEXs, or earn it by providing lending liquidity, token liquidity, or staking xCREDI LP tokens. Once acquired, CREDI can be sold, provided as liquidity on DEXs, or converted to xCREDI.
xCREDI is created by depositing CREDI in the Module X security module and serves as Credefi’s profit-sharing and governance token. It can be traded on DEXs, used in governance participation, or provided as liquidity to the xCREDI/USDT pair on UniSwap. Additionally, a portion of all fees and interest collected on the platform will fund a buyback and liquidity provision program for xCREDI, creating deflationary pressure.
The CREDI token allocation includes 21% for the token sale, 25% for ecosystem incentives, 14% for reserve, 10% for liquidity, 5% for partnerships and advisors, and 25% for the team. This strategic distribution aims to ensure a balanced and sustainable growth of the Credefi ecosystem.
Source: credefi tokenomics paper
Credefi Main Features
Credefi offers a robust suite of features to enhance the decentralized finance ecosystem’s lending and borrowing experience. These features include non-custodial wallets, on/off ramp functionality, advanced credit risk assessment, and real-world asset (RWA) collateral management.
Non-Custodial Wallets
Non-custodial wallets provide users with heightened security and control over their digital assets by allowing them to manage their private keys. Unlike custodial wallets, which are controlled by centralized entities, non-custodial wallets ensure that users have complete autonomy over their funds. Credefi integrates non-custodial wallet functionality seamlessly into its platform, enabling users to create a new wallet or connect an existing one, such as Metamask or WalletConnect. This integration enhances security and simplifies the onboarding process, fostering greater adoption of blockchain technology.
On/Off Ramp
Credefi offers an intuitive on/off ramp feature to streamline lending participation. This allows users to purchase stablecoins and engage in lending easily, then quickly cash their earnings into the real economy. This functionality is crucial for users new to DeFi, as it eliminates the complexities typically associated with purchasing stablecoins and participating in lending. By simplifying these processes, Credefi is making DeFi more accessible to a broader audience, driving the widespread adoption of blockchain technology and decentralized finance.
Credit Risk Assessment
Credefi strongly emphasizes robust credit risk assessment to ensure financial stability and security. Using data validated by Experian, Credefi evaluates each borrower’s qualitative and quantitative aspects. Qualitative assessments include due diligence, KYC/KYB, and web scoring, providing a comprehensive company overview. Quantitative assessments involve empirical analysis of borrower characteristics and historical data using applicational and behavioral scorecards. This rigorous process enables Credefi to predict repayment probabilities and determine appropriate risk premiums, facilitating informed lending decisions.
RWA Collateral
A distinctive feature of Credefi is its use of Real-World Assets (RWA) as collateral to secure loans. This practice mitigates risk by leveraging traditional finance methods within the DeFi space. Credefi partners with established financial institutions to administer these collaterals, ensuring legal rights and due diligence. In the event of a loan default, the collateral administrator liquidates the asset and refunds the principal amount to lenders. This process involves initial screening, collateral valuation, and legal documentation, providing a comprehensive security framework for all parties involved.
Integration with XRP Ledger
Credefi Finance has integrated with the XRP Ledger (XRPL), enhancing its DeFi offerings with innovative real-world lending products. This partnership leverages XRPL’s decentralized, efficient blockchain to provide secure financial solutions. The integration includes short-term bridge liquidity loans for European SMEs, backed by thorough risk assessments using Credefi’s bespoke risk engine and Experian’s attestation. This step strengthens Credefi’s commitment to pioneering secure, innovative financial solutions for users.
In conclusion, Credefi’s innovative features create a secure, user-friendly platform that bridges traditional and decentralized finance. These features collectively drive the mass adoption of blockchain technology, offering a seamless and secure lending experience.
Source: credefi.finance
Is CREDI a Good Investment?
CREDI presents a promising investment due to its innovative approach of combining traditional finance with DeFi, offering stable returns through real-world asset collateralization. This utility token enhances security for loans and provides additional yield opportunities, making it useful for future financial stability and growth. However, potential risks include regulatory changes and market volatility, which could affect its adoption and value. Additionally, the success of the platform heavily relies on user trust and widespread adoption, which may be challenging in the competitive DeFi landscape.
How to Own CREDI?
To own CREDI, you can use the services of a centralized crypto exchange. Start by creating a Gate.io account and get it verified and funded. Then, you are ready to go through the steps to buy CREDI.
News on Credefi
According to what was announced on Credefi’s official X channel on May 22, 2024, Module X has been successfully relaunched as a permanent feature on Credefi Finance Platform 2.0. With a 6-month staking period, CREDI tokens will be burnt and converted to xCREDI at decreasing rates. xCREDI holders gain governance participation, bi-annual profit sharing, and instant ROI. Additionally, CREDI and xCREDI can remunerate lending liquidity providers in case of loan defaults.
Take Action on CREDI
Check out CREDI price today, and start trading your favorite currency pairs.
Related articles
What Are Altcoins?
What Is Ethereum 2.0? Understanding The Merge