Onchain Lending for Productive Assets | Kayode Oluwole @Web3LagosCon

Good afternoon, everyone. My name is Oluwaleke and I'll be speaking about on-chain lending for productive assets. On-chain lending for productive assets. I think a lot of people will be interested in this topic because um it's basically a combination of some of the conversations we've had earlier, especially in terms of tokenization. It's On-chain lending for productive assets is basically an alternative way of explaining what tokenization is.

And over the next few minutes, I'll be talking about it and how we are applying practically

at Odacity.

Three years ago I was there

at Web3 Lagos conference and we had a very interesting conversation with one of the speakers and which his name was Barto. And he asked the question, "What limits prosperity in Africa?" I know that sounds a little bit odd outside what we're talking about in Web3, but the conversation that talks about how we can use the tools that we have, the technologies that we have to attract capital, prosperity, and you know, productivity into our immediate ecosystem. And then I talked about the vicious cycle of poverty, which is some of the things or one of the things, one of the major things that limits capital and prosperity, beg your pardon, in Africa. Then it starts with low income, then obviously if you have low income, you have low savings.

If you have low savings, you have low investment and the worst part of all this no capital formation when you have no investment, which essentially leads to low productivity. And you see, the question evolved into how can we break that cycle? How can we use the blockchain as a capital aggregation layer to attract prosperity and to do productive things? You see, to understand what on-chain lending is, we need to, you know, go back, you know, into memory lane. You know, we started with peer-to-peer money with BTC, then we moved into smart contracts, then we moved into programmable money and on-chain financial markets, which is probably the holy grail of everything we'll be doing in Web 3 today.

I've seen some founders here today speak about you can borrow against your stake. I think it was the founder of Odu how you can borrow against your stake without without, you know, dissolving your positions. And we've seen that manifest a lot in a lot of other ecosystems. So, if you have your BTC, if you have your Ethereum, there are so many financial engineering and, you know, you know, smart contract engineering that's come into using crypto assets where you can provide liquidity, then also take that same asset and, you know, collect the liquidity staking token, go to another protocol, and basically loop all those assets. So, what we are seeing now is the technology have been applied, you know, beautifully with a lot of volume in that context.

Now, we want to bring it into the physical and more economic economical world, which is what brings us towards tokenized assets. So, to really understand what we're talking here, I already mentioned on chain lending is how you borrow against the stakes that you have. For example, you have BTC, you can borrow against it without literally dissolving your position. And now we have productive assets. What are productive assets?

Assets that are productive are assets that generate revenue or can have pre-contracted cash flow. So, how do we bring this on chain or how do we attract capital into this kind of assets? A very good example is USDRI that's tokenized over 385 million dollars on chain. I think yesterday I had a news day they they've crossed 400 million dollars. And what they essentially do is deploy loans against GPU clusters or data centers.

I think Mr. Mr. Senator will probably be interested in this conversation because he mentioned nothing is actually going on in the I mean, I'm paraphrasing, in the blockchain policy or ecosystem or the problems that we're actually using blockchains to solve. So, a very good example is USDRI that deploys, you know, loans against um GPU clusters. And we have uranium, we have real estate, and all of these things we've seen that we can actually channel on-chain capital into assets that produce cash flow, assets that produce you know, revenue.

And now, let's talk about what we did at the last sitting. Just before I talk about that, I need to give you a little bit of context on the problems that we see and the opportunity we believe we can exploit with blockchain. So, currently, when you want to get traditional financing or you want to learn from the traditional There are major problems that you have to face. Number one is that it's expensive. Now, if I'm speaking from the POV of some of the operators that we are channeling on-chain lending in in other city, you have to deal with about 35% in interest rates.

And that's not even the problem. The problem is takes additional time, about 6 months for you to actually process that. Now, the opportunity cost of you getting that loan affects your contracts. I'm going to explain what I mean in the next slide. Then, that's why we built our city.

And what we've done basically is we're building an on-chain financing layer for transportation assets. Basically, pre-contracted all these trucks. So, the way we work is to deploy on-chain lending into trucks that are already pre-contracted. So, when I say, you know, trucks, people usually are surprised because it's not It's not It's not an asset that is typical on-chain. So, the way we work is to work with some of the best operators in the country and take the contracts that they have against FMCGs and manufacturers and deploy trucks against them.

You remember I was mentioning when an operator wants to get a loan, you have to deal with how expensive it is, the time it's going to take, and the collaterals you have to deploy. So, instead of dealing with traditional lenders, Our DLT provides exclusive asset fleets or trucking fleets for your operators. And that's essentially how we are currently working. One of the Some of the advantages of what we are doing in our company is that capital aggregation is actually faster and of course the assets are composable. So if you buy into a position of some of our assets like the founder of our company said you don't have to sell your positions.

If you buy say $1,000 worth of truck tokens from our company you are essentially holding an asset that generates revenue and you don't have to disturb that position if you want some additional cash because some of the lending protocols that we are integrated to you can get reasonable loan to value ratios that you can use to get a loan. So far we have a 5,000 truck pipeline to deploy over the next 3 years. We are working with some of the best operators in the country we are supported by the Arbitrum ecosystem and we are supported by some of the leading Asian OEM manufacturers that operate in this country and that is essentially we are using machine learning to finance pre-contracted all these trucks in Nigeria. Thank you very much.