jakiro
Real world assets exist under the chain, and asset owners can obtain expected benefits from it. Relevant ownership benefits are regulated by the legal system and rooted in our social contract.For DEFI on the chain of “Code is Law”, how to adapt to the governance system and legal structure under the chain to help encrypted capital security compliance to capture assets under the chain is currently a problem that needs to be explored and solved.
Following the previous path of combing the assets under the chain through the Centrifuge, this article will sort out the governance system, legal framework and practical path of the assets under the chain agreement through MakerDao’s DEFI perspective.It is hoped that it will be helpful to the project party and builders who are engaged in RWA, and you are welcome to communicate and discuss with us at any time.
The content of this article will cover the more mature RWA projects in MakerDao, such as New Silver RESTRUCTURING, BLOCKTOWER CREDIT, BLOCKTOWER Andremeda, Monetalis ClyDesdale, and Centrifug.
1. Why do DEFIcaptureReal world assets under the chain
RWA’s narrative can also be said to be the narrative of MakerDao’s Defi. It is very necessary to look at the meaning of RWA to the DEFI world from the perspective of MakerDao.
MakerDao is a decentralized autonomous organization (DAO), which aims to manage the Maker protocol running on Ethereum.The agreement provides the first decentralized basic stable currency DAI (which can be simply understood as the US dollar on Ethereum) and a series of derivative financial systems.Since its launch in 2017, DAI has been anchored with the dollar.
In 2021, Defi Summer appeared in many unsustainable Defi yield products, which brought a big collapse of the encrypted market, and credit breach of contract infection in all corners of the spread of ecology.Although encrypted native assets are the key components of DEFI and factor of long -term value differentiated, the current demand for reality cannot be matched with long -term development value.
Due to the high volatility of the cryptocurrency market, relying on single mortgage assets may lead to a large amount of liquidation.For MakerDaoGiantFor the loan agreement, the key considerations are: the value of the collateral is stable.We saw that MakerDao’s mortgage contains cryptocurrencies with unstable value. This unstable fluctuation factors caused risks for borrowing and seriously limited the development space of MakerDao.
Therefore, MakerDao or DEFI is urgentNeed a more stable basic mortgageIn order to support the large -scale adoption of stable currency DAI in the encrypted world, build a sustainable and large -scale channel.
>
(CENTRIFUGE & Amp; Maker: A Partner’s View of Real-Workd Assets)
As one of the most important issues of MakerDao, RWA is constantly discussed and verified by the community, which is considered an important solution.In the Endgame program released by MakerDao in May 2022, one of the key parts of MakerDao constructing decentralized stable coins is to use RWA as mortgages.
The benefits of RWA include: (1) to improve the transparency of market risks and asset use; (2) the combination of DEFI; (3) improvement of bank services and insufficient funds.Capture value in the traditional financial market more stable.
For MakerDao, RWA has two important features -stability and scale.Furthermore, DAI can expand the scope of use by anchoring an anchor -no -encrypted fluctuation risk, stable life, and large -scale assets, especially today, with a low -yield of encrypted asset yields and high US debt yields.Through the value of RWA, MakerDao can continue to expand the scale and growth in the bear market, and be fully prepared for the next bull market cycle.
The most important thing is that RWA can help MakerDao realize its grand vision: allowing a credit neutral and decentralized channels to increase effectiveness for people’s daily life and the development needs of enterprises.A new open DEFI financial market is achieved by open chain, community -driven, programmable, and decentralized protocols.
However, it is not easy to get on the chain of real world assets, which will involve challenges in the design of new product architecture, financial, legal compliance and technical risks, and unknown unknown.
2. How to capture the real world assets under the chain
After clarifying DEFI to capture real -world assets, it is necessary to build a governance system and legal structure suitable for chain protocols or DAO organizations.Of course, some people will say that it is not necessary to operate in this way. It is enough to buy tokens issued by third parties issued by third -party issuance, saving time and effort.
For example, we see the very successful chain fund project on the market -SOLV Protocol, which launched two RWA funds in its V3 version. Solv RWA is the fund manager.AML’s qualified users can deposit stable coins to enjoy the benefits of US debt.According to its press release, the underlying assets of the RWA fund are the tokenized US debt provided by Red Cedar Digital. LTD..
>
(Solv v3 ’s Milestone Achieved: The First Ever RWA Fund Launch))
For projects with small amounts of funds, and under the premise of controlling risks/bearing, it can directly purchase token US debt provided by third parties. There is no problem.But we still need to think about a few issues: (1) How to ensure that the transaction opponents that provide underlying assets (Red Cedar Digital. LTD.) will not go bankrupt?Think about the ftx of the day and the sky;
Although the DEFI project may build its own governance system and legal structure, it may cost a huge cost,But this is a hedge of riskEssenceIn any case, this does not prevent us from exploring and studying the successful RWA cases in the market to make a choice that suits them.
2.1 The necessity of defering legal packaging
As a billions of dollars of RWA funds, MakerDao, both at the perspective of funds and the qualifications of the legal person, considers the current risk of recognition. These risks come from:
-
Risk of trading opponents.Imagine the case of trading opponents’ bankruptcy/running, MakerDao needs to guarantee any third party (including fund manager/investment consultant) without being able to directly control, dominate, transfer its huge amounts of funds;
-
Main qualification certification.The chain agreement or DAO organization cannot complete the customer identification and certification (KYC/AML) required for legitimate holding assets, which makes it impossible to purchase and hold the assets under the chain.In the same way, it is impossible to hold its own IP assets;
-
Cleaning for bankruptcy.Once the default, bankruptcy, and liquidation of assets under the chain, because the chain agreement or DAO is not a legal subject, it cannot immediately interact with the courts and liquidation agencies in the real world.Then it is necessary to ensure that MakerDao has the ability to exercise the right to dispose of assets under the chain through the governance system and legal structure.
Therefore, it is very necessary to build a governance system and legal structure for the chain agreement or DAO organization through the method of the Legal Wrapper, and through the opening of the DAO governance and the legal person’s subject governance system to achieve the DEFI governance of the asset under the chain assets under the chain assetscontrol.
>
(The Dao Legal Wrappers and why you need they)
2.2 How to pack legal packaging
Legal Wrapper is a collection of legal frameworks or legal entities specifically for chain protocols or DAO organizations. It provides a recognized legal status under the relevant jurisdictions of the chain or DAO organization.Its essence is to “packaged” the chain agreement or DAO organization in a legal framework, or “set” a legal framework, which is connected to the real world interaction, so that the chain protocol or DAO organization can carry outconnect.
Legal packaging is not absorption or replacement. The chain protocol or DAO organization continues to run on the chain. It is just a legal entity that transferred some of its functions and responsibilities to DAO, so as to obtain legal protection in relevant jurisdictions, management tax and supervision obligations,, supervision obligations, and supervision obligations.Sign contracts, owns assets, conduct legal payment, and participate in real world interaction operations.DAO and multiple wallets are reserved for direct control of smart contracts, vaults, and any assets on any chain, and only provide funds for entities packaged by legal packaging when needed.
From the perspective of RWA, we can specialize in the special purpose of the chain protocol or DAO organization, and the corresponding legal entity corresponding to the “lower set” to capture the value of the asset under the chain.
Related reading: Why does DAO require legal packaging (Legal Wrapper)
2.3 How to govern the legal entity under the chain
>
We have further explained with the current MAKERDAO practice with the largest volume of RWA assets.
The picture above is the architecture of Foundation + SPV, which is established for the RWA project according to the MakerDao MIP58 proposal. It aims to capture the value of the underlying RWA assets through the governance and control of the legal person entity of the foundation.
First of all, the foundation of RWA Foundation # 1 based on the Foundation Company Law of the Cayman Islands 2017, and the foundation can provide a flexible governance framework for the chain agreement or DAO organization.
-
As a legal person’s entity, the Foundation does not require any registered capital, no shareholder/member role, making the foundation become a single independent orphan legal person entity; the foundation can also be similar to trusts.), At the same time, the foundation can also be bankruptcy-remote, even if MakerDao or the foundation “Go Dark” will not affect each other.
-
As a legal person’s entity, the Foundation can realize (1) interact with the entity under the chain, such as signing, providing services, etc.;Limited liability; (4) According to DAO’s resolutions, DAO performs a series of operations under a series of chains.
Secondly, the Foundation’s legal entities can make organizational documents such as ArticleS of Association and the company’s register (Memorandum of Association) to tailor -made the governance system for MakerDao.Any resolution and execution; specifying the Supervisor and Directors of Fiducial Duties to be governed by the Power of Attorney, which is assured that MakerDao can fully control the legal person’s physical governance.
Finally, according to Makerdao’s resolution, Foundation # 1 is used as an independent orphan holding company, holding the equity equity of SPV # 1 1 legal person entity.SPV # 1 is established in the local jurisdiction according to the asset attribute under the chain, and is captured under the chain assets by the foundation of the foundation.For example, if the asset under the chain is located in the United States, the Delaware LLC can be set up as a SPV asset -holding assets. The funds are derived from the loan agreement signed by Foundation # 1 and MakerDao.
Although we can also see the governance system and legal structure of SPV + trusts on some other projects,The overall principle is: (1) to ensure the governance and control of the protocol or DAO organization on the chain; (2) DAO organization/tokenholder is the beneficiary; (3) the legal entity of the packaging can be legally, effective, and timely disposal assets.
3. MakerDao’s RWA practice case
Since participating in the financing of Solar X energy projects, MakerDao has explored a set of RWA paths suitable for Defi by gradually practicing -that is, through the method of Foundation+ SPV or Trust of DEFI, the value capture of the assets under the link is achieved.The transaction structure is unsatisfactory.
Here are several successful RWA projects in MakerDao for reference, including New Silver RESTRUCTURING, Blocktower Credit, Blocktower Andremeda, Monetalis Clydesdale, and CENTRIFUGE’s trading architecture provided by AAVE.
3.1 MakerDao -New Silver RESTRUCTING (Credit asset RWA)
New Silver should be MakerDao’s first official RWA project. It was established in 2021. The debt limit reaches $ 20 million. The underlying asset is the reason for the mortgage loan as the initiator.SPV financing on Centrifuge tokens.
In November 2022, the community proposed to upgrade and reorganize the New Silver project in 2021. This upgrade reorganization completely adopted the above Foundation+ SPV trading architecture, which can be described as textbook -like practice.
>
In the new Silver RESTRURURING upgrade and reorganization trading architecture, the main participants include:
RWA Foundation, the foundation was established in 2021, operating the previous Huntingdon Valley Bank (HVB) project, which was controlled by MakerDao -stipulated in the governance document Director to make any resolutions or exercise any rights according to the MakerDao Resolutions to exercise any rights.EssenceAs a result, through the system of governance + fund chain governance on the MakerDao chain, MakerDao can fully control the legal person’s physical governance level.
NS Drop LTD, as a wholly -owned subsidiary of the RWA Foundation, is the main body of the transaction. Participated in the subscription of the Drop tokens initiated by the financier and provided funds for the financier;The relevant rights entrusted by MakerDao Resolutions; instructed the trustee Ankura Trust to conduct a series of asset operations according to the trust agreement.
Ankura Trust is to ensure the security of the issuer’s SPV asset independence and MakerDao funds. According to the trust agreement between the issuer’s SPV and the trust company, the mortgage of the SPV credit assets and the pledge of the SPV equity are agreed to ensure that MakerDao’s assets are complete and the breach of contract will be timely.The forehead is guaranteed to provide a guarantee for the security of MakerDao funds.
3.2 MakerDao -BLOCKTOWER CREDIT (Credit asset RWA)
BlockTower Credit is a credit assets tokenization project initiated by the BlockTower Capital. It was implemented in November 2022. The upper limit of the entire project’s debt was 150 million US dollars, divided into 4 asset pools.Blocktower Credit, as the initiator of assets, financing through the publisher SPV under it under the Centrifuge tokens.
>
(Blocktower Credit -Commercial and Legal Risk Assessment -Part I)
>
The trading architecture of BlockTower Credit is similar to the New Silver RESTRUCTURING. We further split it, one of which is the operation of the capital side, that is, how to convert the asset security compliance on the chain to the chain, and still control it in the hands of MakerDao;Operation, that is, how to substitute the assets under the chain and obtain the funds of MakerDao.
From the perspective of MakerDao’s DEFI:
1. MakerDao first realizes the control of the TACO Foundation through governance (the TACO Foundation is the same as the RWA Foundation by MakerDao governance control);
2. Through the loan protocol signed by the Taco Foundation with the BlockTower Drop SPV, MakerDao’s DAI funds are provided as a mortgage with Drop token;
3. This part of the fund is used to subscribe to the Drop tokens on the Centrifuge platform, which is issued by the issuer SPV holding the bottom -asset of BlockTower.
From the perspective of asset financing:
4. BlockTower Credit Partners, as the initiation of assets, puts credit assets into the issuer’s SPV through “real sale”;
5. In order to ensure the security of the issuer’s SPV asset independence and MakerDao funds, the issuer’s SPV will sign a trust agreement with Ankura Trust Trust, which agrees that the mortgage of SPV credit assets and the pledge of the equity of SPV.Some (that is, the TACO Foundation) to ensure that MakerDao’s assets are complete and timely disposal of breach of contract, it provides a guarantee for the security of MakerDao’s funds;
6. The issuer’s SPV will issue two tokens: Drop and TIN to tokens through the CentrifUGE asset tokens. Among themBlocktower Credit Partners subscribed.
3.3 MakerDao -Blocktower Andremeda (US debt RWA)
Blocktower Andremeda is one of the largest RWA projects currently in MakerDao. The debt limit is 1.28 billion US dollars. The current asset size exceeds 1 billion US dollars.This is a U.S. debt RWA project initiated by BlockTower Capital, which is implemented through the Taco Foundation to diversify the capital funds and invest in U.S. debt under the chain.
>
In the project architecture of BlockTower Andremeda, the main participants include:
TACO Cayman Foundation, which was established in 2022, operating the Blocktower S3/S4 credit asset RWA project of the previous asset management scale of $ 150 million.Like RWA Foundation, the foundation is controlled by MakerDao. According to the Foundation’s Articles of Association 4.16, the foundation Director needs to make any resolutions or exercise any rights based on MakerDao’s governance voting.
Blocktower Capital, as an investment consultant of this project, signed an investment consultant contract with Taco Foundation to manage the funds of various accounts of Taco Foundation and make investment decisions; Coinbase and Galaxy Digital are used as access to gold service providers; CELADON Financial G ROUP, as a broker,Investment decision -making decisions of investment consultants; Wedbush Securities Inc. as a fund custodian; Ankura Trust is a payment agent.
In this architecture, MakerDao is more about the related matters of the TACO Foundation as a legal person’s contract subject to fulfill the investment in the chain, and separate investment decisions in traditional finance from asset custody to achieve compliance of risk control.
Compared with the BlockTower Credit project, we see the same point: At the DAO governance level, the system of governance on the MakerDao chain + fund chain governance is used to ensure that MakerDao can fully control the legal entity governance level.
The difference is that at the level of the value capture of the underlying assets, AndreMeda directly invests funds through the method of investing funds, investment consultants, investment brokers, fund custody, and payment agents.Due to the different underlying assets of the S4 project, the structure of the foundation and SPV is added. The SPV is specially used to capture the underlying assets after the tokenization of the CentrifUge platform.
3.4 MakerDao -Monetalis Clydesdale (US debt RWA)
Although we see that several BlockTower projects have been operating very successfully in MakerDao, some members still say that there are too concentrated concerns of trading opponents, such as playing multiple important roles in the project, such as investment consultants and assets.
Therefore, the Monetalis Clydesdale project initiated by Monetalis founder Allan Pedersen aims to explore a safer RWA path.The project proposed in January 2022 that in October 2022, it passed and implemented. The initial debt limit of the project was 500 million US dollars, and in May 2023, the debt limit was increased to $ 1.25 billion, and the assets were invested in the US debt ETF.
>
In the trading architecture of Monetalis Clydesdale, it is very important for the operation of the capital side, that is, how to convert the asset security compliance on the chain to the chain, and still control it in the hands of MakerDao:
-
Establishment of property trust.First of all, the BVI trust company called JAL, the company set up James Asset Trust through Declaration of Trust.As the Dai/ETF trust assets provided by MakerDao, JAL holds MakerDao MKR token holders to the beneficiary of the beneficiary of the trust governance documents to the trustees’ control of the trusted assets through trust governance documents.
-
MakerDao’s governance control: According to the Declaration of Trust, the trustee Jal must take any action based on MakerDao Resolution; and take any action to approve and agree with the MakerDao Resolution; the trustee Jal must not take any any.Actions that have nothing to do with MakerDao Resolution.
-
Establishment of equity trust.After dealing with MakerDao’s governance and control of the trustee JAL trust property, it is necessary to use the equity of the trustee JAL as a trust property to set up James Asset Share Trust. DAO MKRToken holders are beneficiaries.
As a result, on the one hand, MakerDao realizes control of JAL trust property (corresponding to the DAI trust assets provided by MakerDao), on the other hand, it also realizes the equity control of JAL (corresponding to the trustee JAL).In this case, any operation needs to pass/verify the MakerDao Resolution, and the exchanges of funds are not controlled by any third party (MakerDao Vault -JAL Trust Property Custody Account -Sygnum Bank hosting account).
Under such a transaction structure, MakerDao implements: 1) less or no risk of opponents without transaction, that is, third -party or investment managers are unable to change the legal terms, nor can it be exposed to related funds; 2)Governance architecture; 3) The holder of the MakerDao MKR tokens through a trust guarantee the ability to deal with the risk of liquidation and liquidation of the underlying assets in a timely manner; 4) Clarify the use of funds and the risks of not being misappropriated.
Next, the asset investment of the trustee JAL is relatively simple. Through Coinbase, DAI is made into USD, and fund custody and ETF transactions are performed through Sygnum Bank.
3.5 Centrifuge -RWA RoadMap (US debt RWA)
CENTRIFUGE participated in MakerDao’s multiple credit asset RWA projects in the early days, such as the New Silver RESTRUCTRURING and Blocktower Credit mentioned above.The specific process is not expanded here. Those who are interested can read the article we previously analyzed Centrifuge ——From the essence of RWA, decentralized asset financing agreement CentrifugeEssence
>
What I want to talk about here is the Centrifuge Prime service, which aims to help encrypted capital/DEFI Agreement/DAO vault to capture the revenue value of real world assets (such as US debt -free income).Earlier, AAVE community proposed on August 8, 2023 that it would invest in the AAVE vault to invest in RWA assets with CENTRIFUGE in cooperation with Centrifug to capture 5% risk -free income based on US debt RWA.
>
(POP: ANEMOY Liquid Treasury Fund 1)
Above the figure of Centrifuge Prime service is divided into two parts:
Step 1: It is necessary to perform legal packaging for the DEFI protocol on the chain, such as setting up a dedicated legal subject -the Cayman Foundation for AAVE.On the one hand, the law subject can replace the infinite responsibilities of DAO members, on the other hand, can also be used as an independent subject for the implementation of RWA value capture. It is governed and controlled by the AAVE community, and it plays the role of a bridge between DEFI and Tradifi.
Step 2: Centrifuge will set up an Anemoy Liquid Treasury Fund 1 asset pool.Different from the underlying credit assets of the previous asset pool (installing the assets into the SPV and generating NFT mortgage into the corresponding Centrifuge asset pool), this time ANEMOY Liquid Treasury Fund 1 The underlying asset of the asset pool is US debt.Anemoy LTF fund of assets direct token.
>
(ANEMOY Liquid Treasury Fund 1)
ANEMOY LTF is a fund registered in BVI. First, the fund tokens the fund via the CentrifUGE protocol; then, AAVE invests the vault funds in the CENTRIFUGE asset pool corresponding to the Anemoy LTF and generated the fund tokens.The assets invested by the AAVE vault through the agreement were allocated to the Anemoy LTF Fund; finally the Anemoy LTF Fund bought US Treasury bonds through access to money, custody, and brokers to achieve US debt income.
In the same way, CENTRIFUGE helps to help the stablecoin project Frax Finance capture asset returns under the chain through the above way.
Fourth, the combination of RWA and DEFI does not need to be licensed
We see items including this article, and most RWA projects on the market are only targeted at a single/limited capital party, or only for qualified investors, and retail investors cannot participate.This is because of regulatory compliance and the requirements of the Local Securities Law. If retail investors participate, it will face the IPO -like distribution cost.Therefore, it is not that any RWA platform can be opened to all users after the asset chain.
In our previous research report, “RWA Wan Character Research Report: Disassembling the implementation path of the current RWA, exploring the development logic of the future RWA-FI”, we can still see that some projects can combine with DEFI to get out of a one without permission, retail investors, retail investorsThe path that can participate.
例如Ondo Finance & Flux Financ，Matrixdock & T protocal 的DeFi 借贷路径，即以合格投资者需许可的限制Token 作为抵押，设立DeFi 借贷池，散户可以将稳定币存入DeFi 借贷池，获取借贷利率Increase.In addition, there are also onDo & amp; usdy, matrixdock & amp; USDV’s life -interest stable coin path, that is, the restrictions required to be licensed by qualified investors are used as mortgage, issuing stable coins, and retail investors can deposit stable coins in exchange for stable currency.
The combination of Defi is self -evident. Previously, PENDLE also saw PENDLE access to RWA assets to achieve interest rate interchange.We are also actively exploring the combination of RWA and DEFI. It is currently constructing a platform for US debt RWA to explore the infinite possibilities of RWA based on this.
5. Write at the end
At present, it can be called the RWA 1.0 version on the market. What is more solved is the financing demand on the asset side under the chain (whether it is through the Security Token Offering, or the mortgage borrowing method) and the investment demand on the capital side (how to doTo capture real world assets with low risk, stable life, large -scale, large -scale, and unrelated to encrypted fluctuations).
RWA will also develop a more 2.0, 3.0 version that is more integrated with the real world in the near future.Before that, planned ahead.
