Brú Finance, the largest blockchain fintech company using RWAs as collateral for NFTs, has successfully tokenized over $500 million in real-world assets. Tokenization should occur at the source or under a decentralized third party's custody rather than through digitizing existing paper documents. By partnering with over 1,400 custodian warehouses in India, Brú Finance creates NFTs that serve as collateral for lenders to finance agri-commodities.
Many Web3 organizations have been trying to adopt and bring real world assets on-chain since 2017–18. But success has been far and few.
We, at Brú Finance, realized that digitization of the existing paper documents is not an appropriate way of tokenization. The tokenization of the real world assets should take place either at source or under a custody of a decentralized third party.
The tokenization could be done either at the time of the issuance by the issuer. We can take the example of gold. Miners should do the process of tokenization and create tokens for the gold produced at the mine. Tokens could be created in the form of the gold bars and authenticated using some unique number printed on the bars which cannot be altered. The entire journey of the gold bar could be captured.
Another point of tokenization is possible when the assets are in the possession of the custodians. Tokenization of the real world assets can solve the existing problems like ownership, IP records, duplicacy of the tokens, etc.
To solve the above-mentioned problems, Brú Finance has adopted the tokenization of real-world assets like agri-commodities when they are in the custody of a warehouse. We have onboarded more than 1400 custodian warehouses in India and the number is growing continuously. We create tokens in the form of NFTs when the goods are stored in the custody of the warehouses. These NFTs are then used to provide collateral to lenders for borrowing against commodity NFTs.
As the tokens created by Brú Finance are backed with real world assets stored with custodians, they are more reliable in terms of quality/quantity and are free from volatility risk. This makes them excellent collateral for financing.
We are focused on commodities and commodities finance. The farmers and other supply chain players like traders, processing mills etc. deposit their agri-commodities like rice, wheat, sugar, etc. in the warehouses.
The third party decentralized verification agencies record and audit the information like quality and quantity of the goods stored in the warehouse. This data is recorded on our Blockchain protocol. On a daily basis, all the stakeholders can determine the most accurate last traded price on regional and national exchanges and markets. This price information is used for issuance of Non-Fungible Tokens (NFTs) against the warehouse receipts (WHRs).
For lending, our partners use these commodities as collateral for loans. In this way, Brú Finance is connecting real economy with decentralized world using the NFTs supported by RWAs.
Since launching the platform in early 2020, we have already tokenized assets worth more than $500 million. We are the largest blockchain fintech company using the RWA as collateral for NFTs. Using these NFTs, the platform provides loans to Indian farmers, thus creating a social impact. We have witnessed the rise in the income level by 30 to 40% of the Indian farmers. 85% of these farmer borrowers have land holding less than 4 acres thereby creating grassroot social impact.
Efforts of Brú Finance are recognized and supported by Indian government entities, banks, non-bank organizations, thousands of platform users, and prestigious institutions like MAssChallenge, UNDP’s SDGia, ETHDenver, Microsoft, University of Toronto’s CDL, etc.
In India’s most prestigious business school IIM-Ahmedabad, our success story in social impact finance to Indian’s farmers using Blockchain is being taught.
We have won accolades across the globe from organizations like Indian Bank’s association, DCB bank, Polygon, Indian Merchant’s Chamber for innovative usage of blockchain technology in facilitating lending against commodities backed by NFTs.
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