DeFactor brings liquidity to real world assets on Algorand

0:01i am ashton addison from block west capital for investment pitch media and the Crypto Coin Show and today i'm watching interviews once again with alejandro guitierrez operations lead at d factor alejandro welcome back to the show it is a pleasure to see you again ashlan thank you very much for having us back it's a pleasure to be here and i'm great that we having the chance to

0:22reconnect likewise and so much has happened since we spoke in the middle of 2021 a lot of ups and a lot of downs in the market as well i know your team has done a lot to move the d factor project forward and for the viewers that didn't see our first interview let's just start off by getting a recap and an overview of what are the solutions that defactor

0:44is working on and then we can dive into the details perfect yeah so the factor is focusing on redefining financial services using d5 as a vehicle and what we want to do achieve is kind of optimizing the way that companies are bringing or are transacting in the device space especially companies that have or deal with real world assets

1:13and they are focused kind of the in the traditional financial space so all the things this is kind of enhancing and optimizing all the processes that currently are a bit clunky and are huge operational board and just make all that easier for companies just to tap into all these liquidity pools that are currently in the in the defy market definitely and

1:38with real world assets there's so much untapped capital and you know money that's locked in things that really can't be used and i'm hoping that you know blockchain and tokenization can really help create liquidity and accessibility for capital that's locked in these kind of assets and i know that this is part of your goals as well and i would love

2:02to hear the rationale behind obviously this is a huge problem but what inspired you to take on the problem well i think one of the reasons why we focus on kind of solving these problems is like a traditional have been working in the efi space for probably two years a little bit more than that

2:28and we were one of the first movers in the real world asset space and we worked with the likes of maker we were actually the first pilot maker did with a with a logistic invoice actually so basically collateralizing allergistics invoices as an asset and just taking phones from maker and being able to finance these type of operations

2:56and also its centrifuge right that is one of the first movies the real world so when we're doing all these transactions are replacing a assets into the device space we realized that operationally was was a huge burden right and you needed to kind of change your processes and traditionally in the financial space

3:24process are complex because there are so many parties and you need to actually be sure of the reconciliation piece so we say look this is a fantastic opportunity as you say there are a lot of markets that can be tapped if we put some a layer this technological layer that is going to be make easier and for companies just to tap into the device

3:50space and use that source of liquidity as an alternative so liquidity exactly same as they do with traditional fiat at the moment right and that's where this is coming from you touch a really interesting point about a liquidity that is trapped right and we see that all the time there are multiple applications that defy can help solving one of them is the

4:14trade finance space trade finance is extremely required in international commerce as i call it is the fuel of international commerce so if there is no trade finance there is a huge impact on transactions around the whole world and d5 has the potential actually to solve that issue right like there is there is a gap at the moment 1.5 trillion dollars

4:43that is growing we call it and that the fight can probably have doesn't as an inch to help right also you have some luxury goods that are travelling one of the examples are always given is whiskey so i'm based in ireland so i love whiskey i know the culture of the whiskey but you have this cask that in these warehouses right and even though

5:10they have value the value is increasing dramatically year after year they're still all the producers can still not tap into that asset that is there and that's one of the things that we are focusing and we are willing to just help this is small distilleries to use like extracts all the liquidity out of those assets that are part doing nothing in a way

5:32great point alejandro and i want to dive a little bit further into these real world assets and how exactly we tap into the liquidity you know i was thinking as an example having a building you know there's been discussions about capital expenditures on large buildings and how do we tap into that and i feel like this craze in nfts with digital art

5:55and also real world art that's also has nft versions of it is one kind of way that people are taking real world assets and tokenizing it and i know you spoke about the liquidity pools the partners you have and the liquidity pools are getting really large already but i'm curious with these real world assets is there a tokenization of an nft that allows you

6:18to then utilize that on the internet or is it without nfts and it's just the liquidity cools maybe you can explain that a little bit further no yeah definitely like nft is a huge component of what we do right because as you mentioned real world doesn't need to be digitized in order to be locked in those liquidity pools so it's funny because there was

6:42this huge boom about nfts right in the last year or so i've been working with nft for the last two years but more in the financial as a financial vehicle to extract liquidity from the device space so just as you're saying like a look there is a digitization of a real-world asset right and that nft that is created right allows us to lock

7:10that asset into a liquidity pool to extract crypto crypto assets right you call it stable coins die usdc usd or whatever other one that you can and after a the loan is repaid right and there are multiple options what you can do with that asset right one is just release it back into the owner and the owner will decide look i want to just use it again as a vehicle for financial

7:36purposes or i can just put it in a secondary market sell it or just put it back into his wallet or her wallet and just keep it there as an investment right and out of that you'll be seeing more and more we're working in a project that basically is it's a it's a marketplace for a real world art for physical art but every single one of those pieces is

8:02tokenized right so there's a token that is linked directly into the into the real paint painting and the idea would be for us to be able to provide liquidity into every single one of those assets that is there right because the nft is already created so that's super simple you'll save that nft lock it into a liquidity pool and then extract phones when the person is

8:26repaying back you just release the nft and the person can just as i mentioned do whatever they want with that nft so the opportunities are huge and i think it's important just to highlight that real world assets are going to be extremely critical for the device space from the growth point of view i don't think we're going to be achieving a growth or the growth that we want

8:52in the device phase if we don't bring real-world assets into it right like a crypto access is up and what is it right now two three trillion dollars market cap that's tiny right that's that does nothing compare with the real world right and especially in the device space you have low 200 billion as i mentioned previously the gap on the trade finance is 1.5 trillion dollars

9:18so if we want to use yeah be a realistic alternative financial alternative for the people out there and the market needs to grow and i think real world access is just a critical one real estate for sure yeah that's a as soon as defy managed to grasp a process that you can bring real estate and talking as real estate that there are some some pilots happening

9:46is looking good and but i think we are not there yet and that's one of the things that indeed factor are going to be working at the end of the year as well great information alejandro and yeah i feel like 2021 was really the year of d5 but also of nfts as well but more specifically nfts with digital art and getting artists and people that are not

10:11in the financial services or not in cryptocurrency you know their artists and their creators into the cryptocurrency world through this tokenization and i'm curious on your thoughts on when the next wave of nfts or tokenization is going to happen for real estate for these other real world assets where it is the year where real world assets explode and all of these

10:37other different types of assets move into nfts in the blockchain just as art did well i'm hoping that this year is going to allow us to do that because the more mainstreaming away nfts are becoming people are going to understand better what the different uses of nft is right as you mentioned there's a huge boom on the on the art side the ita creator is just bringing this nft

11:04selling them for huge prices but i think the more people are starting to understand all the capabilities and for the nfts the more of these real world uses and business cases are going to be pushed hard into the whole mainstream and into the fintech space right but there is a there is a huge willingness from from traditional systems to start just

11:33understanding if this is how it works we see it like a way we're getting contact regularly with a lot of these institutions as okay what are you guys doing this is super interesting how can we implement and do pilots and understand telling uralica they're starting looking at the fire space they're starting looking at tokenization of assets and when these big players are starting to

11:53get involved into it you know that there's a big chance that will be happening soon a prediction i will assume at the end of the year we might have a more mainstream real world assets play and provide an increase in the volume of real world assets tokenized in the device phase amazing yeah that would be incredible and i feel like having large players in

12:21space jump on board with this as well that have a lot of assets that are management or they have a huge network effect of you know protocol and large communities to spread the word i feel like that would help and i'm wondering if you're already working with any of these layer 1 protocols or many of these huge blockchain platforms to help accelerate this

12:44yeah definitely we have been working let's say or trying to attract what is happening in the real world as a space in ethereum mainly and trying to attract or off create some boss in some other layer one protocols and as i mentioned to you

13:11we got our from the guys on algorand because they are interested in having real-world assets tapping into liquidity pools are there they're fairly early on that journey but they understand how critical real world assets are going to be for them so that's that's something we're going to be working all these years and the idea will be just being

13:38able to tap into all the liquidity that the algorithm has that is big enough right and we yeah we have some other ones that i cannot disclose yet but a similar similar approach and but i think for the factory importance is whatever there is liquidity that can help write traditional use of sources we will try to use

14:06be there and help those as originators that are in need for alternative sources of funding right definitely and i know you mentioned you're already working with a lot of these large partners in terms of the product itself growing the ecosystem what is the team's main goals for the next six months and through throughout 2022 in getting to the next stage for

14:35t-factor yeah so the goal so from from the funding perspective the idea would be to place more than 50 million dollars by the end of the year we started actually onboarding our first assassinator in december that is console freight they have been in the space for quite a while after one of the most or long standing pooling in centrifuge i have worked as well

15:04with maker dao so they already placed around two million dollars in the last month and that's grow that you can see we can just go into our dashboard in our web page and you can see actually what is happening from the funding perspective and so that's that's a figure that we have in mind and probably been a bit conservative but we probably like to

15:31and i promise that over the liver then we have oh we're on board in our second house orientator at the end of quarter one it's an irish company that in the involved invoice discount in space and they want to really looking forward to into tapping into the fire space because what happened if i spilled as well it's

15:57allowed them some flexibility on the potential services that they can provide right sometimes traditional money tends to be really a structure in the way that are going to be placing it the five will allow them a little bit more flexibility and that flexibility will allow those just to kind of try different products that there is a huge need in the market and

16:22that they cannot provide traditional money right so there's another things that we have from the technology point of view doing finalizing integrations with centrifuge a huge news centrifuge is one of biggest partners they got one of the last fire chains actually the last pirate chain in the poke auction so congratulations centrifuge

16:46and that's huge news for us as well because that means that we'll start working with them into the polkadot ecosystem and we are aligning a lot of our strategies with the national centrifuge in that regard and we need to be where they are so we'll be just starting tapping into into into polkadot pretty soon and that will consume big chunk of our tech resources as well

17:16and by the end of the year that they will be just have at least six or seven as originators are tapping into a liquidity pool in the centrifuge ecosystem either in the system ethereum or in polkadot right that will that will make our lives where easier because you don't have to pay for the cost of fee sorry of gas yeah it's one

17:44of the most critical components so yeah you see like it's a pack on the ncaa side like marketing or bringing huge push every broad a new cmo super experienced person will be just giving some some more information to the community pretty soon someone has worked with

18:11one of the largest layer ones in the space and the idea will be used to have a huge marketing push this year and also we are creating our last division and our last division is going to be that research and development and that let's call it like at the funky side of the factory because we are in a traditional space right now assets but we understand

18:38that order and more risky side is needed as well and there are a lot of different pros that can come from from that side of the of the business so yeah as you can see we have we have gone beginning of 2021 and we were just structuring we're going to as a company and i think we have now a clear path that is going to be presented as well to the whole community pretty soon

19:04amazing alejandro tons of updates i'm glad you mentioned centrifuge partnership i know we were discussing that in our last video that was before they won the pair chain offering and i think that centerpiece has great fundamentals so i'm looking forward to seeing how that plays out with defector and thank you for all those other updates as well and for the viewers for

19:25them to follow along as these updates roll out and to learn more about the factor ecosystem token and the community what's the best way for them to learn more now most of the things that you will find in our webpage that is www.defactor.com or whether you will be able to find telegram links discord linkedin and any other social media so that's

19:53what i would suggest to everybody too and yeah regularly we'll be just posting a lot of updates in the webpage as well sounds great i will leave all the social links you mentioned and the dfactor.com ecosystem website all in the description box below thank you so much alejandra for coming back on the show i really appreciate it all the best with de facto throughout

20:17the rest of this year and until we speak again and let's follow up in the near future awesome nation thank you very much for having us again it's a pleasure to be here and yeah let's keep in touch you