FAQ

Creditcoin Q&A | May 2023

In this months Q&A we discuss GATE + G-CRE swaps, interest rates, our strategy to move away from G-CRE and more...

Creditcoin Team

Jun 1, 2023 • 4 min read

Welcome to May's Q&A, where we answer all your burning questions about the world of Creditcoin, Gluwa and more (tune in next month where we'll be revealing the meaning of life, I promise we've finally figured it out!)

In this month's Q&A, we tackle everything from GATE + G-CRE swaps, Investor DAO interest rates, to our G-CRE vs CTC showdown strategy you've all been waiting for…

So sit back, relax, and let's dive in.

1) Does the listing of mainnet CTC mean that G-CRE become extinct? Or will G-CRE and CTC coexist in different layers?

We'll never have the power to make G-CRE extinct as we cannot force people to switch their G-CRE for mainnet CTC. This will be true even when mainnet CTC does get listed on exchanges. In other words, G-CRE will always exist on a different layer. It is an ERC-20 token whereas CTC is a separate mainnet token.

Nevertheless, it is our goal to consolidate the ecosystem into one token - CTC - as much as we can. Rather than punishing users for holding G-CRE, our strategy is to create incentives which encourage people to freely switch their G-CRE into CTC.

The biggest incentive to switch is of course liquidity. In other words, which token is easier for our users to sell and trade. Given that only G-CRE is currently tradable, getting mainnet CTC listed is a major priority for us.

Once both tokens are easily tradable, users will naturally swap their G-CRE for mainnet CTC, given the utility advantages it holds, be it to record loan transactions, partake in CTC staking, or with the release of Creditcoin 3.0, perform complex multi-chain transactions.

2) The roadmap does not indicate when GATE will be swappable to CTC. When will the swap be available?

Alongside the launch of Creditcoin 2.0+, we will be releasing a web-app on Creditcoin.org which allows users to perform a one-way swap from GATE or G-CRE to mainnet CTC. Mainnet CTC is required in order to partake in Creditcoin staking. We'll release a full swap guide when this feature officially launches.

3) With CTC2.0+, is it possible to swap G-CRE and CTC in both directions?

No. At launch, only a one-way swap from G-CRE → CTC will be supported. This feature will be provided via a web-app on Creditcoin.org.

4) In a market with rapidly rising interest rates, 4% APR on the Flexible Yield product may not fully offset the higher risk compared to a traditional savings account. What is Gluwa's strategy for addressing this continuous increase in rates?

We are constantly looking at the market and considering ways in which to improve the competitiveness of Investor DAO products. Our biggest focus and advantage, in this respect, is delivering new Investor DAO opportunities which offer considerably higher interest rates than traditional savings products.

Nevertheless, given the new rate environment, it is certainly possible that we will revisit the Flexible Yield's competitive positioning before launch. At this point, nothing is fixed (pun intended). We'll share any information regarding possible changes when they are confirmed and not before.

Regardless, in its currently proposed form, the Flexible Yield product is still differentiated from most traditional savings products in a number of ways:

Firstly, our product is crypto-native and competes with other stablecoin interest rates across DeFi, where it remains competitive in both interest rate and flexibility.
Secondly, Flexible Yield is focused on delivering real-world social impact. This may not be an important factor to every investor, but for some investors, how their money is being used is just as important as how much it makes them.
Finally, the Flexible Yield product should be considered in the context of Investor DAO's other products, offering Investor DAO members a convenient environment to 'park' their funds and continue to earn interest between Investment Opportunities.

5) With the proposed transition from PoW to PoS in Creditcoin 3.0, how will network security be maintained and improved? What mechanisms are in place to encourage participation from token holders and ensure a fair and secure block validation process?

The full Proof-of-Stake design specifications for 2.0+ will be released around the time of the upgrade, and is based on Polkadot's Nominated Proof-of-Stake (NPoS) implementation. For an overview of how NPoS works, check out this blog by Polkadot here.

Details on the the Creditcoin 3.0 consensus mechanism will be released in the technical paper for Creditcoin 3.0 scheduled for Q4 this year, as per the Creditcoin roadmap.

6) Will the Gluwa wallet assume a more central role in the business, or will it primarily serve a supporting role, demonstrating the capabilities of RWA and CTC?

Our primary focus is on delivering more features under the Creditcoin umbrella. This includes new web-app based features. Nevertheless, in the same way you still need a wallet to interact with DeFi protocols, the Gluwa Wallet will still be necessary to perform various activities within Creditcoin's RWA investment ecosystem, for example, to perform KYC and partake in new Investment Opportunities.

That's all for this month's Q&A session! We hope you found the answers to your questions informative and helpful.

Don't forget to follow us on Twitter to stay up to date on all things Creditcoin and Gluwa. And be sure to tune in next month for more exciting updates and answers to your burning questions. Thanks for joining us!

About Creditcoin

Creditcoin is a foundational L1 blockchain designed to match and record credit transactions, creating a public ledger of credit history and loan performance and paving the way for a new generation of interoperable cross-chain credit markets.

By working with technology partners, fintech lenders such as Aella, and other financial institutions across global emerging markets, Creditcoin is securing capital financing, building credit history and facilitating trust for millions of underserved financial customers and businesses based on the principles of Real World Assets (RWAs).

About Gluwa

Gluwa is an Real World Assets (RWAs) platform, connecting global capital to emerging market lending and investment opportunities through blockchain technology, and empowering users with the choice and information they need to prosper.