Creditcoin

Creditcoin Q&A| July 2023

This month we discuss the 2.0+ Testnet results, how to claim a CPC NFT, RWA investment risk and more...

Creditcoin Team

Jul 31, 2023 • 4 min read

Welcome to the July RWA Q&A, where we answer all your burning questions about the world of Creditcoin, Gluwa and more.

In this month's Q&A, we share our Testnet takeaways, discuss the Creditcoin roadmap, delve into the ways we mitigate RWA investment risk, share how you can still claim a cute penguin NFT and more besides.

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

What was the main purpose of the Creditcoin testnet? Did you achieve your objectives?

The Creditcoin 2.0+ testnet is primarily a way for our development team to gather technical performance data, gather community feedback and finally, iron out any bugs before we roll out the full 2.0+ mainnet update later this quarter.

To that end, it has been a great success, with a huge number of participants joining from all around the world. In total, 91 countries participated and far surpassing our initial expectations.

In terms of real-world performance, having such a high number of participants meant we were able to stress test the Network under more conditions than we were expecting. For example, raising the Validator cap from 50 to 200. All this information will help inform the final design implementation for 2.0+.

In addition, community feedback on a number of topics, including documentation, UI and more has been received. By getting all this info, we’ll make sure that the full release goes even smoother. Plus, we received several bug reports, some of which have been certified by the dev team, and will be resolved before the full release.

As a bonus, it was also a great opportunity for our team to attract new members to the community and generate excitement for the launch of the full update later this quarter.

So all in all. A great success. Thank you all!

For those of us that didn’t have a WL spot, is there any way for us to get our own Credit Penguin NFT from the CPC collection?

Yes, don’t worry if you missed out, there are still plenty more opportunities to win your own Credit Penguin! Otherwise, you can always buy one of the many listed ones directly from OpenSea. Let’s outline all the ways available to you:

Creditcoin Events: We’ll be giving away Credit Penguin NFTs as part of future community events. If you want to get your hands on one completely for FREE, this is the way to do it.
Buy on OpenSea: Of course, if you’re impatient, you’re always free to buy a Credit Penguin directly via one of the various listings on OpenSea.

As a reminder, CPC NFTs do not confer any direct utility and are simply cute collectibles to represent your support for the Creditcoin Network.

What are the short-term and long-term goals of the Creditcoin project roadmap?

You can view our complete roadmap for 2023, including early 2024, here. But for a quick overview of the main priorities in the coming months:

Q3 → Release the Credtcoin 2.0+ mainnet upgrade.
Q4 → Release the Creditcoin 3.0 technical paper + design details.
Q1 2024 → Launch the Creditcoin 3.0 Testnet.

What will happen if my RWA investment through Gluwa Invest faces financial trouble like bankruptcy? Are there safety measures to prevent or mitigate such events?

The reality is, there simply isn’t a way to earn up to 20% RWA yield with Investor DAO completely risk-free. When returns depend on loans being paid back, the chance of default always exists. However, there are some important aspects in the way we operate that reduce this risk:

👨🏻‍💼 Our deal sourcing, diligence and monitoring ability. Gluwa Capital performs extensive due diligence on RWA borrowers for each debt financing deal. This includes a thorough analysis of product traction, management team, governance, and most importantly financials, all to help us gauge the risk of the borrowers and the deal. We don’t just keep all this info to ourselves of course, you can check the new Heads of Terms for every new Investment Opportunity and have a look at the company's financial yourself.
🚗 Our partners’ risk mitigation ability. We’ve already mentioned the richness of data our partners have on their books. When it comes to preemptively reducing and monitoring default risk, leveraging this data with machine learning and other forms of statistical models makes all the difference. Our partners’ also use business models designed to help mitigate risk. For example, rather than extending loans, Untapped Global provides productive RWA capital directly to businesses — in one case, lending motorbikes to a taxi company. This has the benefit of protecting Untapped from default: if the taxi business goes under, there are no outstanding loans to pay back. Untapped can simply reclaim their motorbikes and find a new home for them. That means Untapped is never exposed to excessive default risks. But don’t just take our word for it, every Investor DAO deal also gives you confidential access to the fundraisers borrowing performance, including default rates, total loan value and more to help you make an informed investment decision.
🔍 The Creditcoin Network. Our final ace in the hole is Creditcoin. Whilst Creditcoin doesn’t exactly eliminate risk, it does help reduce information asymmetries between you, the investor, and our partner companies by ensuring that credit performance is auditable on-chain. That means you can always check the performance of our RWA partner companies independently before making an investment decision.
💼 Deal Structure. This all depends on the exact structure of the deal, but most RWA investment deals are at least partially securitised against the borrowers pre-existing capital. This means that defaults don’t necessarily mean losing all of your principal. However, never rely on the deal structure to help recover all your funds, rather, it can simply help partially mitigate downside risks. Remember to consult the terms of each RWA opportunity to see what type of deal it is as well i.e. junior, senior, subordinated debt etc.

About Creditcoin

Creditcoin is the world’s leading real-world asset infrastructure chain, with over 3 million credit transactions recorded to-date. By matching borrowers, lenders and investors on-chain, the protocol is paving the way for a new generation of globally interoperable credit markets.

Having integrated with various fintech lenders, connecting them directly to global DeFi investors, the Creditcoin network has helped thousands of borrowers, businesses, and investors secure capital financing, build credit history, and make global RWA investments.

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.