BlockTalks x Defactor AMA Transcript!
We recently hosted an AMA with Defactor, on October 14th at 2 PM UTC. Many of you might have participated or many of not. But we make sure no one missed out from the knowledge shared by Ernesto Vila, Co-Founder & Alejandro Gutierrez, Operational Lead at DeFactor So here we are up with the AMA transcript, for those who missed the live session, this blog post will be a saver & feeder of knowledge for them.
Introduction Questions Asked By Team BlockTalks!
Q1. Could you please introduce Defactor to our community in layman’s term?
Ans — Defactor is a platform that bridges the gap between traditional finance and DeFi. The platform itself allows companies seeking finance to tokenize their assets, used them as collateral and obtain funding from DeFi liquidity pool.
To put it simply, Defactor is doing what the banks won’t. We are helping small businesses to get funding backed off their assets.
We solve a number of issues but 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 are the advantages of Defactor to the other alternatives in the Blockchain field?
Ans — The advantages we have in this field are that we have some of the earliest pioneers involved in bringing real world assets to DeFi. Me and Ernesto Vila have extensive experience onboarding real world assets within the Centrifuge ecosystem. Then we have Jenny Tsaliki and Bhairav Patel, and they bring extensive experience and knowledge regarding the FinTech industry.
So it is clear that we have the experience needed to compete in the industry, but what really sets us apart is how we all come together as one team. We are a group of tireless individuals who are willing to put in the effort to build a strong and powerful Defactor ecosystem . We have a goal, we have a plan and we have the ability to execute.
Q3. What are the major milestones Defactor achieved so far & what are in the future pipeline?
Ans — The first thing is that we hit our softcap within 2 weeks of launch which was a significant milestone for us. Our partnership with Centrifuge was also very important as it is an ideal match for both of us, working together to bring real world assets to DeFi.
Also, we announced earlier month our collaboration with Chainlink, and currently our focus is our token launch. We are launching the $FACTR token on the 10th of November. We are conducting a Balancer Liqudity Pool which is an innovative mechanism to have a fair token distribution, if you want to learn more about it please check our medium post here —
Also, we will be launching our Springpad next week, that will allow us to pilot transactions with AOs that are interested in Defi. As you can see there are a lot developments so please stay tuned. www.defactor.com
Questions Asked on Twitter For Defactor Team!
Q1. The FACTR design criteria allows to user to receive $FACTR token as Reward for do “ positive actions”, so that got my attention, can you tell us what happen with those Users that act dishonesty?
Ans — For now, dishonest actors will be barred from receiving funding from the platform, it is that simple :-) For good actors that repay on time, they will be rewarded with tokens to incentivize them to use the platform more.
Q2. Through Springpad, you can fund and tokenize all the assets of startups that are coming to the traditional market. So, this means that they are not tied to a single asset class like many other DeFi platforms out there today?
Ans — Defactor will not be tied to one single asset class. We have a clearly defined asset class roadmap. Our idea is to bring first traditional financial services like Trade Finance, Factoring and Inventory Finance. After that we will be exploring luxury goods (wine, whisky and art). The 3rd stage is real estate that will allow us to create sustancial growth in the ecosystem and, finally, we will take NFT and digital assets.
For example, financing will be available for invoice and goods. The types of asset classes that can be accepted is something that can be influenced by the community. Holding $FACTR token will give holders the ability to have a say in Defactor decision making.
Q3. Is it necessary to have the $FACTR token to access Defactor’s services? Do Asset Creators have to pay a fee in FACTR$ for platform access?
Ans — Yes it will be necessary to hold $FACTR tokens to access our services. Fees will also have to be paid in the form of $FACTR tokens. This creates a positive correlation with the use of Defactor services and demand for the token.
Q4. Speaking about the token $FACTR, could you tell me, what should I do to obtain said token, that is, what actions I must take to acquire it or where can I buy it, what are the benefits it offers and what advantages it could have in the future for being hodler of the $FACTR token?
Ans — Our token hasn’t launched yet but we have set the date and we are doing it in a very unique way. On the 10th of November this year we are launching a Balancer Liquidity Bootstrapping Pool.
We are doing this to make the launch as fair as possible. There will be plenty of educational materials found on our social channels so make sure to tune in so you can learn what the Balancer is and how you can participate.
The advantages of holding the $FACTR token is that you will be able to influence decisions made by the Defactor team, through our community based governance.
Here is some information on how to participate on the Balance liquidity pool:
Q5. Real-world asset creators will require the $ FACTR token to access Defactor services, a growing demand for the token as demand for Defactor services increases and more asset creators join. But do you have plans to develop a DAO to establish democracy in the ecosystem?
Ans — Yes, the DefactorDAO is being created as we speak. Being a token holder will allow you to participate in the decision making process 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.
Decentralization is a complex operational framework that we are aspiring to achieve at some point during our roadmap. At the moment, the focus is to grow the ecosystem and bring AOs to try the benefits of Defi.
Questions Asked by our BlockTalks Community Members during live Session to Defactor Team!!
Q1. Sir you mention that “DeFi needs to incorporate real world assets for stability and future growth”, but does it need everyday uses to achieve stability? if so, how will you manage to give it this everyday use and without falling into regulation?
Ans — Correct, DeFi needs the volume of real world assets in order to achieve stability. We are focusing on transactions that are not regulated in most jurisdictions such as Factoring, Trade Finance and Inventory Finance. However some of the assets originators we are onboarding are regulated and licensed Enterprises that are looking to expand the funding access through DeFi or are looking to expand into other markets
Q2. It catches my attention that you mention that “DeFi needs to incorporate real world assets for stability and future growth”, but does it need everyday uses to achieve stability? if so, how will you manage to give it this everyday use and without falling into centralization and regulation?
Ans — Thanks for your question. Not every asset requires stability, but defi as ecosystem requires stability in order to be a true alternative in the financial space. Regarding regulation and centralization. As I mentioned previously, our objective is to have a decentralised ecosystem, however, this will be a process and we need to start with centralised operations and processes as we are not taking digital assets. At the moment, there is not a solution to value goods or provide risk assessments in a decentralised manner. Those are components that we will be working on in the future.
Finally, regulation is something we need to leave with and we are used to manage it in our previous life. The Defi space is small compare to the traditional financial space, but the bigger it gets more and more attention from regulators is going to attract, so we need to prepare and ready when they come.
Q3. I could read in your whitepaper about the role of the “tokeniser” that make mint of NFTs of real world assets, can you tell us what type of assets can be digitized through this mechanism and how is it marketed in the funding pools? Who can receive profits from this process?
Ans — We are able to tokenise a wide range of assets, initially we will be tokenising invoices and inventory, we will then move on to luxury goods and are already in talks with wine and whiskey producers regarding that. We are also looking into tokenising real estate and finally we will be turning our attention to digital assets and NFTs.
The asset originators will be showcasing their assets and businesses to investors, they will be conducting AMAs as well as having a page on our website to tell more about themselves and the yield generated from the financing will be given back to investors with a cut taken by the Defactor platform.
Q4. Existing lenders are ill equipped to understand and lend to the new digital economies. How has Defactor been able to shed light on this problem and get lenders up to speed with the digital lending and developments? What features make Defactor unique in terms of DeFi lending?
Ans — Most Financial institutions have their own play book and create bottle necks by centralizing approvals of multiple asset classes at their facilities, At Defactor we are empowering Asset Originators, with the expertise and proven processes to take control of the lending, therefore fragmenting the decision making into many Originators as per their expertise in the asset class they work with. We Hope the TradeFi becomes a liquidity provider and allow assets Originators to expand.
Q5. Defactor provides a bridge between the world of CeFi and DeFi finance. But, companies around the world are still working on Fiat, and it will take time before cryptocurrencies are fully adopted as a currency. How does Defactor accelerate this adoption process with its services?
Ans — You are absolutely right, The word still functions in FIAT, A lot of Countries are trying to implement a CBDC of some kind in order to coupe with the Crypto disruption, In the meantime we make Crypto payments available to our users and educate them on the use. When the try the speed of receiving payments within minutes as opposed to days, they change to adopt Crypto immediately. The adoption is coming slow but suddenly it will avalanche.
