What is Credefi? How Does it Connect DeFi with TradFi?

What is Credefi?

Credefi platform is one of the innovative decentralized platforms that simplifies DeFi lending and borrowing for small and medium enterprises (SMEs). This decentralized platform bridges the gap between decentralized finance with traditional finance and solves the real-world problems existing in the DeFi space.

The Credefi platform is an innovative platform, combining DeFi protocol with traditional FinTech solutions. In the conventional financial ecosystem, small and medium scale enterprises and DeFi lenders are facing several limitations to access the lending and borrowing services. Some of these noteworthy issues are inconsistent DeFi yields, high interest rates, and a very small number of lenders who actually meet the demands of SMEs. The Credefi platform solves all of these issues with decentralized and secure lending.

How Does Credefi Work?

Being an innovative platform, the functionality of Credefi is also unique and distinct from other existing DeFi platforms. Its functionalities and services are offered to the users in three stages – Portfolio Lending, Project-based P2P Lending, Trade Finance.

The Credefi platform allows users to lend stablecoins to portfolios in the portfolio lending stage. The portfolios to which users can lend stablecoins can range from low to high risk. And, lenders can choose the portfolios based on their risk tolerance. In this process, the Credefi platform helps lenders with the risk assessment, credit score data, and all the other relevant information. Based on the risk involved, all credit portfolios will achieve an APY of around 10%.

In the second stage, the project-based P2P lending stage, the Credefi platform relies on the decentralized nature of blockchain technology. With this, Credefi ensures that it offers peer-to-peer lending services to its users. The major motive behind this stage is to enable users to directly connect with each other for lending and borrowing without any intermediaries. Additionally, the Credefi platform also offers zero-collateral loans.

In the last and the final stage, the Credefi platform combines traditional financial services with decentralization. As a result, it offers lending and borrowing services to a large number of customers without any barriers. This stage also includes trade finance, which implies that lenders and borrowers can meet in a deal. They will also be able to underwrite agreements such as Letter of Credit or Letter of Guarantee.

CREDI: The Native Token Credefi

The CREDI is the native utility token of the Credefi platform and plays an important role in the entire Credefi ecosystem. Let us look at some of the functionalities of the CREDI token in this section.

• The CREDI token acts as a rewards redistribution token and allows lenders to receive CREDI tokens based on their loaned funds.
• The native token of the Credefi platform also works as a security layer, allowing only token holders to access its services and involve in different investment opportunities.
• CREDI token holders can get higher APY compared to non-token holders.
• By holding CREDI tokens, borrowers can get zero-collateral loans.
• Additionally, token holders can access VIP projects and credit portfolios.
• Holders can stake CREDI tokens in Module X of the Credefi platform and mint governance and profit-sharing tokens.

Functionalities of The Credefi Platform

The Credefi platform performs numerous functions in the process of bridging the gap between crypto lenders and small and medium enterprises. We will discuss all the functionalities and responsibilities of the Credefi platform in this section.

• Empowering small and medium enterprises – The primary task of the Credefi platform is eliminating the limitations of the financial system and connecting small and medium enterprises with DeFi lenders.
• Offering collateralized financing to SMEs – Small and medium enterprises usually do not meet the strict rules and policies of the traditional financial system. The Credefi platform is here to simplify this scenario. It allows SMEs to take loans by using real world assets as collateral. This opens doors for a new avenue for secure and streamlined financing.
• Enhanced liquidity and growth opportunities – The tokenization of real world assets not only offers fractional ownership to users but also improves liquidity. The Credefi platform allows SMEs to take loans using their real world asset tokens as collaterals. This, by default, improves liquidity and allows users to have diversified portfolios.
• Seamless transactions – The Credefi platform takes advantage of the blockchain and smart contract technology to ensure seamless transactions.
• Secure and Transparent Financing – The Credefi platform leverages the secure, transparent, and immutable nature of blockchain technology. All the participants or users of the Credefi platform can access its lending services without any worries!