How did a55 lend $5M using Crypto and DeFi?
Intro to DeFi Blockchain (The 3 Components)
Decentralized Finance (DeFi) is an alternative to the traditional financial system, enabled by public blockchain technology to provide a wide range of financial services.
Values > Permissionless, Transparent, Immutable, Secure, and Auditable
Blockchain provides trust in the network.
It eliminates the need for a central authority in networks with multiple participants through three key components:
- Distributed Ledgers
- Consensus Mechanism
- Smart Contracts
1. Distributed Ledger
A database that stores both the current state and historical records of data.
- An immutable, append-only journal with cryptographic verification for all transactions.
- All nodes in a blockchain network share the same ledger.
2. Consensus Mechanism
- Defines how the network validates transactions and blocks.
- Different blockchain architectures use different consensus mechanisms (e.g., proof of work, proof of stake).
- These mechanisms impact transaction processing capacity, energy consumption, costs, hardware requirements, and security.
3. Smart Contracts (Solidity, Java, Python, Rust, etc.)
Smart contracts are applications or programs executed within the context of a decentralized network, such as a blockchain. Example:
Benefits Compared to Existing Financing Solutions:
- Less Burdensome Implementation: Traditional financing solutions often have complex and time-consuming setup processes, whereas decentralized solutions can be simpler to implement.
- Scalability: Existing financing methods can be challenging to scale due to infrastructure limitations, whereas blockchain-based solutions allow for more seamless scalability.
- Lower Costs: Conventional financing often involves high costs associated with intermediaries and fees, while blockchain reduces or eliminates these costs by removing the need for intermediaries.
- Easier Management: Managing traditional financing is often complex due to multiple layers and participants, whereas decentralized solutions provide greater transparency and automation, making management easier.
A55 Case - Pioneer lender in DeFi Brazil
A55 began our journey in Latin America by monetizing data to build a revenue-based lending product.
We connect and centralize a wide variety of data sources (both internal and external) in our data lake (Ansuz), where the data is structured in a way that enables us to relate internal and external information for precise and reliable credit analysis.
Partnership
- In partnership with Credix, we developed a credit protocol based on the Solana blockchain.
- This was our first operation using a decentralized finance (DeFi) protocol for fundraising.
- The credit protocol is based on the Solana blockchain.
- We used USDC, a stablecoin pegged to the U.S. dollar, to raise the funds. This is a significant step in integrating the decentralization offered by DeFi protocols with instruments from the traditional market.
- The funding was structured as a hybrid debt model.
DeFi Funding Structure:
DeFi liquidity pools have billions of dollars available, and our product has the capability to connect these pools with real-world assets in Latin America.
- First regulatory-compliant on-chain asset package worth $50 million.
- First Issuance: $5 million.
- D/Bond’s ERC-3475 technology introduces the Abstract Storage Bonds standard, allowing users to store additional specifications—including metadata, values, and transactions—in a digital token without needing external storage, either on- or off-chain.
Infrastructure:
Amazon Managed Blockchain is a fully managed service that makes it easy to join public networks and create and manage private blockchain networks using popular open-source frameworks: Hyperledger Fabric and Ethereum.
Amazon Managed Blockchain Features
- Fully Managed: Create a blockchain network in minutes.
- Open-Source: Supports two frameworks—Hyperledger Fabric and Ethereum.
- Decentralized: Networks are managed democratically by participants.
- Reliable and Scalable: Backed by AWS technology for reliability and scalability.
- Low Cost: Pay only for the resources used.
- Integrated: Easily integrates with other AWS services.
Ansuz Data Lake
Ansuz connects and centralizes all our data sources, both internal and external. Within Ansuz, data is organized, standardized, and made available across the company, with a primary focus on leveraging artificial intelligence for pricing and building dashboards to track our operations.
Ansuz – Governance and Security Structure
This structure ensures data availability and accessibility, while prioritizing security and compliance across all operations.
Market Update:
MakerDAO, the protocol behind the DAI stablecoin, is currently reallocating $500 million worth of the token into short-term US Treasuries and corporate bonds. This move is part of their strategy to diversify and manage risk while seeking a stable yield, enhancing the protocol's financial sustainability. By investing in US Treasuries and corporate bonds, MakerDAO aims to generate low-risk returns, thus supporting the stability of the DAI ecosystem and increasing the collateral backing its stablecoin.
Sources:
a55 Product Leaders: Ruan Neves & Neilton Rocha
Amazon Web Services, Inc. Rede de blockchain escalável | Amazon Managed Blockchain | AWS
Ethereum Improvement Proposals ERC-3475: Abstract Storage Bonds
