• Dec 01, 2021
• Brú Finance

Brú Finance is a decentralized lending protocol designed to bring real economic activity into a decentralized ecosystem without using digital/synthetic assets that create investor risk and exacerbate the volatility caused by unfettered speculation. Brú Finance is deconstructing the traditional finance (TradFi) paradigm by unlocking new sources of capital with decentralized finance (DeFi) to create a more equitable lending system.

Brú Finance bridges the $4 trillion gap between Traditional Finance and Decentralised Finance to serve the 1.7 billion unbanked & underbanked people and small businesses. With this mission, we are filling the chasm between TradFi and DeFi with real-world assets (RWAs) acting as collateral against DeFi loans — no speculation, no over-collateralization, no volatile interest rates. By channeling yield-seeking capital from the developed world to the unbanked and the underbanked in emerging markets through an open, borderless, and bankless system of finance, Brú is redefining the boundaries of traditional as well as decentralized finance.

We are taking decentralized finance to the door-step and to the wallets of the non-crypto natives and offer these benefits over the current DeFi ecosystem

Brú’s TradFi-DeFi bridge brings traditional & decentralised finance on a common platform and caters to the need of yield seeking first world population and unbanked third world population. Brú Finance bridge creates new opportunities for:

• High yield
• Borderless borrowing & lending
• Easy movement of surplus capital to emerging markets
• Fast access of funds for real economic activities.

The present DeFi ecosystem

Decentralised Finance or DeFi is a crypto native form of finance that removes reliance on central financial intermediaries like brokerages, exchanges, or banks, offering traditional financial instruments. In place of these intermediaries, DeFi protocols use smart contracts on blockchains enabling transactions to take place between users directly without manual intervention and the resultant issues of trust.

With the awareness of DeFi growing, this space is expanding at an extraordinary pace. Presently, the Total Value Locked (USD) in DeFi has crossed the $100 Billion Mark . There are several services and platforms that are enabling access to novel financial products built over digital assets or crypto assets such as Bitcoin, Ethereum and other altcoins. These assets can be a source of passive income like interest while staked onto a crypto protocol or can be used as collateral for borrowing money. These are the feature sets that enable DeFi lending. In the present state, however, lending in the DeFi market is, by and large, confined to crypto assets and to a very small extent to synthetic assets/digital twins that mimic real world assets but there is hardly any lending against on-chain Real World Assets.

The existing DeFi ecosystem is reduced to a copy of wall street style borrowing-lending against highly speculative digital assets.

Brú Finance — introducing Real world assets-based lending to Decentralised Finance

Real-World Assets (RWA) are the physical assets that carry an inherent value because of their attributes; these include precious metals, infrastructure assets, land, commodities, etc. By introducing RWA on DeFi, we open up a significantly bigger market for DeFi ecosystem, connecting 1.70 billion unbanked/underbanked people to a new source of financial capital.

Brú Finance surmounts these obstacles faced by Decentralised Finance by creating a bridged ecosystem of DeFi and TradFi facilitating lending against tokenised, on-chain Real-World Assets.

By straddling the two disjointed worlds of Cryptoverse and “Real-verse” with equal ease, Brú is creating a financial funnel that connects yield-hungry yet risk-averse capital from decentralized finance to real-world economic activities by creating a DeFi lending pool that is used to provide loans against real-world assets like commodities, gold, real estate, inventories, receivables etc.

With interest rates being near zero or even negative in many economies, there is a massive number of people who are looking for higher yield. But at the same time, they can’t digest the volatility of crypto assets and hence such a huge swathe of capital remains unutilised. By creating an ecosystem of fixed rate of interest, high yield, collateralised against verified real world assets, Brú is striving to open the doors of decentralised finance to unbanked and underbanked — the poor, the farmers, the women, the small businesses at one end who are ignored by the traditional finance usually (the seekers of capital) and also to the grandmothers in developed world who are forced to see their retirement portfolio dwindling due to negative yield but who can’t bring themselves to invest into volatile digital assets.

Brú Finance’s unique approach of lending against the collateral of on-chain tokenised real world assets (RWA) brings several advantages to the DeFi Space:

• The core advantage offered by Brú Finance is its use of Real-World Assets as collateral instead of mandatory use of digital assets for borrowing. This allows the real people holding real world assets, engaged in real economic activity to borrow money against tokenised on-chain assets without the need to invest into crypto/digital assets.
• Compared to the crypto assets, real-world assets are less volatile and don’t need very high collateralisation. Brú Finance currently uses a collateralisation ratio of 140% to lend against tokenised commodities that is much lower than the 700% collateralisation ratio that many synthetic asset platforms charge. In future, for some of the assets like real estate and receivables, the collateralisation ratio will further be reduced to 110%.
• Brú Finance uses authentic third-party market data and a combination of centralised and decentralised oracles to value the asset NFTs on its platform thereby protecting the lenders and borrowers from artificial & speculative volatility spikes in the prices of collateral.
• By offering loan against a huge swathe of real-world assets, Brú opens up a new vista for yield-hungry capital to the possibility of lending against $250 Trillion worth of real world assets.

Nuts and Bolts of the Design

Brú has adopted a novel, direct lending strategy through a combination of DeFi-TradFi vehicles. While the DeFi entity of Brú will be a Decentralised Autonomous Organisation (DAO) attracting global pool of capital, the TradFi entity operates in the real world and is responsible for end user asset custody, fiat on-chain/off-chain ramps, collections and enforcement supported by a team of third party validators. The DeFi Protocol and the TradFi Blockchain tokenisation+lending protocol are connected with each other through a bridge which helps transfer real world asset NFTs via a DeFi protocol and simultaneously, move money from DeFi to TradFi world.



Unlike some other platforms trying to link RWA with DeFi who act as intermediaries for real world lenders, Brú is a direct lender in the traditional finance world with its own on-chain asset tokenisation platform.

Brú Finance’s tokenisation platform onboards asset owners and custodian of assets (warehouses for commodities, land registries for real estate, etc.) on its Enterprise Blockchain. The asset quantity, quality and ownership is verified by third party auditors while the price of asset is derived from third-party oracles thereby removing the need to trust a central party. The tokenised assets (NFTs representing RWA) are transferred to the DeFi protocol using a bridge ; finally, lending pools on the DeFi protocol can lend against these commodity NFTs.

Stay tuned to know more about our journey of building a Half Billion Dollar Strong on-Chain Real World Tokenization & Lending Protocol

* The TradFi business of Brú.Finance is carried out by our group entity under the brand name of Whrrl (https://www.WHR.loans) .

Please join our Discord events and Twitter AMAs to connect directly with our founders and ask your queries.

Discord: https://discord.gg/8C9SZXDy2r

Telegram Channel : https://t.me/bruofficial

Twitter: https://twitter.com/bru_finance

LinkedIn : https://www.linkedin.com/company/bru-finance/