Defactor is an integration layer that offers tools for traditional businesses to help them take advantage of DeFi using the current systems and processes they are used to.
The current establishment of banks and financial intermediaries has seen growing troubles like the Evergrande fiasco in the east, as well as the massive dollar printing in the west, in the past few months. All these difficulties could threaten to impair the current financial landscape walls, and maybe its very existence.
The tsunami we call blockchain technology has brought freedom to the masses chained to the centralized financial system for so long. And the liberty it provides is rapidly spreading across the world.
What is Defactor?
Defactor is an integration layer that offers tools for traditional businesses to help them take advantage of decentralized finance (DeFi) using the current system and processes they are used to.
It is a platform that enables asset originators to digitize their data, which they can integrate on DeFi lending protocols. On top of that, it also works as a risk management platform that allows platform users to manage their DeFi assets.
Another essential feature of Defactor is its ability to authenticate and onboard assets, making way for cryptocurrency and fiat bridging, strong governance, and community support protection through insurance and access to liquidity pools.
The name Defactor is a combination of the words ‘De,’ which was derived from ‘decentralized’, and ‘Factor,’ which refers to a form of financing called ‘factoring.’ Merging these two words also symbolizes the platform’s goal of connecting the worlds of decentralized and traditional financing.
Major Problems That Defactor Wants To Solve
Stability and growth, funding gap, knowledge gap, and barriers that prevent investors to access funds are some of the biggest problems that the platform faces head-on.
Through the full utilization of blockchain technology, Defactor can finally reduce the barrier to entry for Real-World Asset Originators (RWAO) and provide them with the necessary tools to conduct DeFi transactions.
Benefits for DeFi Investors
Defactor provides DeFi investors with a series of rich opportunities to earn yield from real-world assets, helps them reduce financial risks, and offers new channels that can further grow their wealth.
This platform would also help the DeFi industry expand and mature even more as it can demonstrate that the DeFi route is a legitimate and effective way of accessing liquidity for businesses.
For people who want to test the DeFi waters first and are not yet ready to make a big jump, Defactor created the ‘Springpad’ platform, which is made for smaller asset originators and allows them to have immediate access to DeFi lending channels.
Through this platform, investors can finally test how decentralized financing works without too much risk on their side, and they can even use it as a sandbox to test new asset classes.
FACTR is the governance token of the Defactor platform, which provides token holders an opportunity to support the ecosystem’s operations and delegate powers to participants.
Defactor said that FACTR is a well-designed token that can efficiently coordinate a network, align interest and incentivize ecosystem growth.
The platform’s governance depends on token holders, who submit and vote on proposals regarding future upgrades and changes of the protocol.
FACTR holders can change tokenomics, protocol fees, yield limits and targets, as well as introduce new asset classes and possibly propose addition or removal of integrations in DeFi protocols.
FACTR also rewards participants, including active token holders, validators, and asset originators that contribute to the Defactor platform. Other participants who make referrals and complete deals would also receive tokens as rewards. Community members who stake their FACTR token will also gain staking rewards, serving as an additional incentive in holding the platform’s token other than governance.
The FACTR token will utilize the Ethereum platform to take advantage of the ETH network’s industry-recognized security and massive developer toolset.
FACTR Buyback-and-Make Model
Defactor’s generated revenue can also buy back the FACTR token from exchanges and distribute it to the ecosystem’s partners, such as stakers, nodes, and other participants.
This model, which Defactor calls ‘Accrual Mechanism,’ provides the community with benefits which include capped token supply, rewards for positive ecosystem actors, continued issuance, the incentive to generate revenue and growth, and buying pressure on the token.
Are Defactor Assets Insured?
The project is currently in talks with some of the world’s largest insurance providers to equip Defactor assets with insurance to provide the community with peace of mind knowing that their hard-earned assets are safe from expected and unexpected risks.
Defactor deals with uninsurable assets by working with third-party collection agencies and debt purchasers to reclaim investors’ funds, which would serve as a safety net even with the absence of an insurance policy.
Additional Protection On Assets
The project said that it would consistently implement strict standards for the asset originators and deals, including producing documentation for all transactions inside Defactor.
These documentations would increase transparency, traceability, and security to ensure that every participant inside the platform is well protected from possible fraudulent transactions. All deals, customers requesting financing, and offered collateral go through risk assessment processes. It will also require RWAO to present collateral for deals to ensure that a strong assurance level would back every transaction.
Types of Assets Allowed In Defactor
The protocol will have three phases, each supporting various types of asset classes. The first phase would focus on leveraging its partnership with Consol Freight and Accelerated Payments to finance invoices.
The second phase will center around real estate, non-fungible tokens (NFTs), and luxury goods, as Defactor is already working with some of the biggest names in these fields to bring their assets into the platform.
The third phase will be involve scaling Defactor, which would finally bring real-world loans on the platform through the help of Lendwise and iHuddle.
The company said that legal titles could undergo tokenization within the platform, and digitizing crucial documents would have clear advantages for liquidation, cross-border collection, and future market trading.
The reliability, security, and convenience of putting digitized assets on the said transactions are already proven. They can be a viable way to transfer ownership from asset originators to lenders.
Defactor also added that as its platform grows, it will reassess its blockchain to ensure that it can still create tokens at high volume and speed while maintaining low costs.
KYC and AML requirements
Defactor has made it clear that RWAOs are required to submit traditional KYC and AML requirements before letting them access the platform.
Once these certifications are approved, they will reflect on the network and prove a user’s credibility in joining the platform.
Defactor has recently partnered with Hypersign, creator of ‘HyperFyre,’ a privacy-preserving marketing tool that helps businesses whitelist and KYC their users and prevents fraudsters from participating in their transactions.
The two company’s campaign, which will promote and utilize HyperFyre, will provide participants a chance to have a slice of the $2,000 worth of FACTR tokens.
Defactor has also inked a deal with Centrifuge, a platform that helps borrowers finance real-world assets through blockchain technology to expand the applications of DeFi further.
Blockchain dominance appears to show no signs of slowing down anytime soon. In fact, it could continuously expand faster as more companies are utilizing this technology to bring innovative services, especially in the field of finance.
Defactor, for its part, has willingly joined in this quest to further bring financial freedom to people who, for so long, have been locked out from participating in the traditional financial economy.