Securitization addresses a miss-match between the needs of lenders & borrowers but the current solution benefits the middlemen instead.
Securitization incentivized by tokenomics directly benefits borrowers; even small ones in developing markets not served by Wall St.
This is the total amount allocated to Incrypture - Smart Structure.
Incrypture's Smart Structure protocol will put the "engine" of securitization onto the Cardano network and be utilized by both TradFi markets as well as DeFi markets. This proposal addresses a need in TradFi of removing some middlemen in the process. It will also provide tools for DeFi securitization and structured products.
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt obligations (CDOs). Investors are repaid from the principal and interest cash flows collected from the underlying debt and redistributed through the capital structure of the new financing. Securities backed by mortgage receivables are called mortgage-backed securities (MBS), while those backed by other types of receivables are asset-backed securities (ABS). See https://en.wikipedia.org/wiki/Securitization
Market:
Incrypture's TradFi CRT pilot project is to build a solution for FNMA/FHLMC Credit Risk Transfer vehicles with unpaid principal balances of over 2 Trillion USD.
Product:
Build a modelling and structuring tool for the CRT market as a minimal viable product. The MVP will be used by the team to bootstrap further fundraising via a token sale and ISO to develop tools for other TradFi securitization markets.
Budget:
50k, Developer costs 625 hours x 80/hr
Road Map:
Code Development Business Development
Month 1 Specifications from Existing C# Code Base Engage with FHLMC & Hedge funds
Month 2 Code Development in Plutus/Marlowe White board business cases with both
Month 3 Development and testing Establish 1 year road map
Month 4 Address Issuer and user feedback MOU with an Issuer and a User
Success Measures:
1. MVP developed for further project funding
2. Buy-in from at least one issuer and one user
Project White paper:
https://drive.google.com/file/d/1DnQh_0FTh266Wh9nIrsl73wW_4bP6PyI/view?usp=sharing
Team Incrypture:[Contact - adilabd@incrypture.com]
Adil Abdulali - Founder
Sean Kim - Founder
Michael Grossberg - Advisor
Andrew Chasen - Advisor
Mathematicians, computer scientists, structured finance specialists and an SPO that have traded Mortgage Backed Securities extensively.