Creditcoin Q&A | October 2023

Welcome to the regular Q&A, where we answer the communities most burning Creditcoin questions! With the successful passing of Creditcoin's first governance proposal, CIP-1, we've taken some extra time today to answer your questions about what that means for token holders.

By passing CIP-1, the community has voted to create a new ERC-20 wrapped mainnet CTC token, called wCTC. This new wCTC token is designed to enable mainnet token liquidity, with users able to swap between CTC <-> wCTC in order to access trading options on Uniswap.

For a full explanation of CIP-1 and a discussion about the future of the CTC token, please head here. On top of CIP-1 questions, we'll also be answering a variety of other questions on RWA and more.

If you'd like to have your question answered next month (and win some CTC for getting selected), then make sure you follow us on Twitter and tap the bell icon to get notified when the Q&A survey goes live! Otherwise, feel free to drop into the Discord, say hi, and ask any questions you may have. And in case you missed, check out our recent Creditcoin 2.0+ highlights to discover more about the protocol's biggest upgrade yet. Let's jump in.

CIP-1 Questions

1) Is there a plan to list Mainnet CTC on Exchanges? Do you have a plan to integrate Mainnet CTC and G-CRE?

On the topic of listings, naturally listing mainnet CTC is a long-term objective, however we can’t comment on any specific matters related to listings and/or token prices due to financial regulations.

Moreover, there are technical challenges associated with switching the token listed on each exchange. Ultimately, it’s up to each exchange to switch (or preferably migrate) their listed tokens from G-CRE → CTC (mainnet).

Of course we’re working towards this step, but given the technical complexity involved, it’s not a quick or easy process.

On the topic of a token integration, yes we intend to merge both tokens in order to simplify and unify the ecosystem. The exact timeframe for this hasn’t been confirmed, but it’s in scope as part of the Creditcoin 3.0 update. However, it is important to note that any migration will not be mandatory.

2) Why are we making CTC mainnet swappable to G-CRE? This is different from the original concept, where only a one-way swap from G-CRE to CTC was available.

This is a slight misunderstanding of how the wCTC proposal will be implemented. First of all, it’s important to point out that CTC (mainnet) and G-CRE will not be directly swappable. Instead, users must first swap their CTC (mainnet) → wCTC, at which point they may trade their wCTC for G-CRE on a Uniswap liquidity pool.

While the Foundation will provide some liquidity to this Uniswap pool in order to allow CTC (mainnet) holders to liquidate some of their positions, we cannot provide unlimited G-CRE liquidity for obvious reasons.

This means the amount of CTC converted from mainnet into G-CRE will ultimately be limited by the available G-CRE liquidity in the pool. If someone wants to swap wCTC -> G-CRE, they need a G-CRE seller on the other side of the trade first.

As a result, while G-CRE can always be swapped 1:1 into CTC (mainnet) via the specifically designed swap tool we’re releasing, the proposed wCTC solution does not guarantee that CTC (mainnet) can aways be swapped 1:1 into G-CRE, as it relies on a floating exchange mechanism on Uniswap instead.

Long-term, the ultimate goal of the **Foundation is to merge both tokens, with G-CRE being made redundant and CTC (mainnet) being listed on exchanges. As a reminder, G-CRE was only ever created as a means to enable liquidity via exchange listings and token vesting. Once mainnet tokens are readily tradable, then G-CRE no longer serves a necessary function.

However, due to technical reasons explained in the wCTC proposal, any kind of migration or mainnet token listing isn’t expected in the near future. Therefore G-CRE will remain the primary trading and vesting token in the medium-term.

Creditcoin RWA questions

3) What Does it Mean to Tokenize Real-World Assets?

Tokenization is the process of converting real-world assets, like real estate, artwork, commodities, or intellectual property, into digital tokens. These tokens can then be securely stored, transferred, and traded on a blockchain, with each token representing a direct ownership stake in the underlying asset. Tokenization enables the division of these assets into smaller, more easily tradable units.

The primary benefit of tokenization is in unlocking new liquidity for various asset classes. For example, as a seller, a houseowner could tokenize ownership shares in their house and sell a portion of them in order to raise liquidity, making historically illiquid asset highly liquid instead. As a buyer, this would also make it much easier to make smaller investments and become an asset-owner. Given the soaring property prices across the world, this could give smaller investors a more accessible way to enter the real estate market.

However, there are many other advantages too: Smart contract-enabled automation, increased cryptographic security, greater transparency, and more.

An example closer to home would be a loan (forgive the pun.) By tokenising loans and putting them onto a transparent ledger, blockchain can make it easier to settle transactions, exchange bond agreements and establish clearer visibility over the health of the overall lending ecosystem. Not only that, but by adding smart contracts into the mix (coming with Creditcoin 3.0), the enforcement of loan terms and agreements can be automated, unlocking new ways to guarantee trust and therefore help distribute credit worldwide.

Tokenization can be implemented in almost any real-world market today, including commodities, fine art, real estate, collectibles, shares, funds or even services. The exact asset tokenization process for various assets will be different on the type of asset and protocol being used. For example, fungible vs non-fungible, or digital-native vs off-chain.

For a more detailed overview of what tokenizing real-world assets means for the future, check out our blog: https://creditcoin.org/blog/real-world-asset-tokenization/

4) What exciting developments can the community look forward to in the next phase of Creditcoin evolution?

Creditcoin 3.0 is the next major protocol upgrade set to deliver sweeping changes and the biggest upgrade to Creditcoin’s core feature set yet, evolving Creditcoin from a read-only credit network into a fully EVM-compatible layer 1 blockchain network interoperable across multiple chains.

The upgrade, coming next year, is set to deliver two major new features we’ve outlined for you below.

EVM-Compatibility

The first major milestone in our Creditcoin 3.0 journey is scheduled for Q1 of next year, with the first version of Creditcoin 3.0 transitioning the network to a fully EVM-compatible chain.

By making Creditcoin EVM-compatible, the protocol can expand its utility beyond simple bullet-loan recording into a variety of new RWA use cases, including smart-contract enforced loan products, greater access to tokenization tools and more.

Universal Smart Contracts

Once that’s done, the next major update to Creditcoin 3.0 will be a cutting-edge multichain contract coordination tool we’re calling ‘universal smart contracts’.

By launching a master universal smart contract on Creditcoin 3.0, the protocol will be able to coordinate, interact and update smart contracts on other chains. This might sound simple, but the possibilities are truly endless. By enabling multichain smart contract harmonisation, Creditcoin 3.0 can facilitate thousands of new cross-chain applications and RWA tokenization opportunities.

Our most-anticipated feature, Creditcoin-enabled multichain marketplaces, will allow users to trade assets across chains without ever having to peg assets through bridges.

For example, users will be able to list their cryptoassets on Ethereum and trade them for other cryptoassets on BNB chain directly. The master contract on Creditcoin 3.0 can accept a token listing on Ethereum, verify a counterparty payment that happened on BNB, and then release the token to the buyer’s address back on Ethereum.

5) RWAs are becoming popular. Being an innovative 1st mover, how will Creditcoin continue to stand out from the upcoming rush of RWA projects?

The simple answer is real-world adoption. The Creditcoin protocol has already processed over 4,741,791 transactions, the vast majority of which come from our financial partners in emerging markets. Take a quick look at our other stats for yourself:

Total loan value: $79.7M
Number of loans serviced: 909k
Number of serviced customers: 337k

Looking to the future, Creditcoin is set to become the world’s first RWA dedicated EVM-compatible protocol once the 3.0 upgrade is fully implemented. Not only will the upgrade make it easier for users to connect to RWA on Creditcoin, it will also enable hundreds of new multi-chain RWA opportunities across multiple different chains, including Ethereum and more.

But the differences go beyond just first-mover advantages. Creditcoin is designed to be an L1 infrastructure chain, connecting the various dots of tomorrow’s global RWA ecosystem together. At the end of the day, this means that Creditcoin isn’t necessarily a competitor to other RWA projects, but rather, a complimentary protocol offering unique synergies.

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 and 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.