The Credit Collective is a group of builders and investors dedicated to advancing blockchain-based real-world credit solutions. The community already numbers dozens of projects & investors actively engaged. A problem and opportunity common to all these projects is finding initial on-chain liquidity to validate novel RWA lending models and open the doors to growth. This presents an unique opportunity for Celo to establish itself as the leader in on-chain lending. This proposal requests up to 2MM cEUR funding from the Celo Community Fund to accelerate debt liquidity and to catalyze the growth of Celo’s RWA and lending protocols ecosystem.
We want to start by adding a new KPI to the blockchain discussion that today is overlooked but we believe will become one of the key success factors: Total Debt Value Locked
While TVL represents the value of all the assets on-chain, Total Debt Value Locked represents the total stable-coins locked in smart contracts and being lent for real-world use cases. Existing examples from Credit Collective members include: loans to small businesses in Africa, factoring loans to farmers in Latam, retail loans to Venezuelan immigrants, etc.
At the moment it might feel like a “niche” KPI, but if we all believe that blockchain will become the infrastructure of the next financial system, and believe that Celo should be its home, than this is the KPI that we should be looking at. It’s still small globally, and we as a community have the ability to become a leading player.
That’s what we are going after - making sure that the leading debt pools out there will be deployed on Celo.
Credit Collective was seeded by Flori Ventures and is presently led by Tomer Bariach and Reuven Palatnik. We recently published a “Credit Collective Hello world” forum post describing our activities and goals. It is advisable to review it before proceeding. Some companies and investors who are active in the collective include:
Jia: Loans to SMEs in Kenya and the Philippines - https://www.jia.xyz/
impactMarket: Impact-driven open finance - https://www.impactmarket.com/
Flow carbon: Futures for the carbon market - https://www.flowcarbon.com/
Solidworld: Futures for the carbon market - https://www.solid.world/
Quipu: https://quipu.com.co/
Simplify: https://www.symplifi.co/
Huma finance: https://huma.finance/
Ethic Hub: https://www.ethichub.com/en/
Credix: https://credix.finance/
Flori Ventures: https://www.floriventures.com/
Reuven Palatnik: https://www.linkedin.com/in/reuvenpalatnik
Draft Ventures: https://draftvc.com/
Merci Corp: https://www.mercycorps.org/
Outlier ventures: https://outlierventures.io
Cerulean Ventures: https://cerulean.vc
Addem Capital: https://addem-capital.com
Devoa Capital
You can see the full list of companies and investors who are part of the credit collective on our website: www.credit-collective.com
This proposal details Credit Collective’s request for 2MM cEUR that will enable us to start seeding liquidity into new liquidity debt pools launched on Celo, and elevate our thought-leadership work and strategic partnerships. Credit Collective proposes to utilize funds in line with our two strategic objectives, covered in detail in the previously referenced forum post.
A minimum of three quarters of the funds will be dedicated to staking into debt pools on Celo. The following parameters will be used when making staking decisions:
Up to 25% of the funds will be used to grow the community and market for RWA on chain lending. Some example activities planned include:
Informed by our knowledge in the blockchain space, we have identified the following risks: Market risk: adverse events in crypto markets can severely reduce the value of funds available. This is mitigated by denominating the budget request in cEUR. Because our goal is to seed new pools, there is a relatively higher risk of defaults. We expect the yield generated will cover potential loss across all staking pools.
To reduce implementation risk, and since lending pools are funded with stable coins, we plan to denominate our budget in cEUR, understanding that there exists the requested amount of cEUR in the Celo Community Fund and this will not create any adverse effect on price the CELO.
A Multisig wallet will be used to manage and deploy the funds with a required 3 of 4 (in the future, 5) approvals for transactions. The Multisig contract address is 0x5f411351E6566409f9b0B8d03873846e0C7201B3 and can be found here. The initial signers on this multisig are:
Command celocli governance:show --proposalID 117 --node https://forno.celo.org
You should see:
Running Checks:
✔ 117 is an existing proposal
proposal:
0:
contract: StableTokenEUR
address: 0xD8763CBa276a3738E6DE85b4b3bF5FDed6D6cA73
function: approve
args:
0: 0x5f411351E6566409f9b0B8d03873846e0C7201B3
1: 2000000000000000000000000
params:
__length__: 2
spender: 0x5f411351E6566409f9b0B8d03873846e0C7201B3
value: 2000000000000000000000000 (~5.000e+24)
value: 0
metadata:
proposer: 0x42B4a02f79438D558AB33E326638ed752b94D187
deposit: 100000000000000000000 (~1.000e+20)
timestamp: TBD
transactionCount: 1
descriptionURL: https://github.com/celo-org/governance/blob/main/CGPs/cgp-0084.md
We intend to turn the Credit Collective into a self-sustaining organization by the end of these two years in two main ways (and will explore further opportunities during the 2 year implementation):