Following Uprets, we are delighted to announce our collaboration with EntroFi, one of the first protocols venturing bridging DeFi and real-world asset financing. This is the second inter-protocol collaboration (in addition to Liqee) of USX’s credit line extension, leading USX adoption by allowing permissioned institutions and protocols to obtain USX liquidity from dForce.
DeFi first took off in last year’s “DeFi Summer” with more than $242 billion TVL, according to DeFi Llama), however, we could say it is still in its infancy compared to size of traditional finance, such as real estate, stock, gold and bonds, with market size over 500 trillion dollars.
DeFi is currently constrained by its over-reliance on crypto assets, with all yields coming from lending, trading, and leverage from crypto assets. This restrains its capability to scale up and go mainstream. One of the keys to breaking the bottleneck is to extend DeFi offering beyond cryptocurrency to cover a broader scope of assets, such as RWA (Real-World Assets), and to expand its counterparties beyond the permission-less DeFi protocols to whitelisted protocols, permissioned or regulated institutions.
We believe DeFi is evolving into a more complex and advanced model, featuring:
1)support for real world assets; and
2)mixed trust models, i.e., combination of fully-permissionless, partial permissionless to fully permissioned.
We have already seen MakerDAO and other major players onboarding RWA originators into their ecosystem, allowing permissioned institutions to interact with DeFi protocols. These trends signal more RWAs will soon be originated onto blockchains through tokenization, enabling SMEs and established institutions to access financing transparently and efficiently, and allowing DeFi users to generate solid returns that are less correlated to the broader crypto market volatility.
Through the collaboration with Liqee, dForce enabled permissioned intra-protocol liquidity, allowing users to mint USX within approved limits on Liqee Lending by using liquid staking assets (rToken launched by StaFi, wstETH launched by Lido, etc). The partnership with EntroFi is another intra-protocol opportunity to help connect dForce to the RWA market.
The partnership with EntroFi will unlock opportunities for dForce to:
- onboard a diversified portfolio of real-world institutions and counterparties (i.e., crypto trading desks, supply chain borrowers, solar farm developers, etc);
- extend loans to real-world assets (i.e., real estate, bond, secured loan, acquisition financing, receivables, etc).
It will greatly diversify USX’s loan portfolio and introduce non-crypto yields to DeFi. dForce will work with EntroFi to enhance the onboarding process for RWA originators seeking to obtain DeFi liquidity.
EntroFi has been working with various originators such as traditional SMEs and financial institutions to onboard real-world-assets and connect to borrowers, and providing due diligence and execution assistance.
This protocol-to-protocol integration will allow dForce to use EntroFi as a portal to connect to borrowers in various forms, and facilitate easy execution for RWA deals. Borrowers can use EntroFi’s portal to interact with dForce’s USX protocol.
As more real-world institutions and corporations seek to incorporate DeFi into their financing strategies, dForce will continuously work with partners including EntroFi, UPRETS, NAOS, and others to onboard RWAs and serve borrowers globally.
EntroFi is an innovative DeFi lending platform designed to significantly improve the efficiency of financial infrastructure by bridging DeFi capitals directly with loan borrowers who use real world assets or native NFTs as collaterals. In specific, it is a two-way portal that pools and channels DeFi liquidity to SMEs and individuals who have been neglected or marginalized by traditional financial intermediaries, while on the other hand, brings a variety of real-world collateral assets (account receivables, real estates, pledges of equity, manufacturing & logistic equipment) as well as existing native NFTs (Metaverse properties, artifacts etc.) to DeFi protocols by converting them into a new type of financial NFTs.