Defactor is the integration layer and tooling for TradFi businesses to leverage alternative finance with DeFi.
Defactor's business model is based on taking a fee for connecting Asset Originators (AO) and Liquidity Providers (LP) thereby providing transaction funding, supported by dynamic risk reporting that gives visibility and transparency to all 3 parties (Defactor, AO & LP).
For LPs, Defactor’s platform provides access into a new asset class of private credit, in particular, a fixed-income product in DeFi. Furthermore, the Real-World Asset aspect of our business model brings stability to LPs through non-correlated asset allocation and greater diversification.
A key component that differentiates Defactor is the emphasis on risk management. Asset Originators are subject to a fair, but rigorous due diligence process to build trust between all the actors involved in the protocol. In the medium term, asset originators on the Defactor platform will be able to reduce their cost of capital and improve payment terms by building a track record in repayments. In addition to the collateral that Asset Originators commit, a contribution is required in the form of an investment into the junior tranche to ensure they have skin in the game, accounting for the first losses in case of defaults.