Frequently Asked Questions

Find a list of frequently asked questions on how Tinlake works below. Is your question not answered, feel free to reach out to us at hello@centrifuge.io.

Table of Contents

Index

Asset Originator
Companies that provide advance financing to multiple businesses. Asset Originators get financed via lenders in Tinlake Pools.
RWA
Real-World Assets; these are non native crypto assets, such as invoices or music streaming royalties.
SPV
Special Purpose Vehicle - a legal entity created to fulfill narrow, specific or temporary objectives. Typically used by companies to isolate the firm from financial risk. In Centrifuge, SPVs enforce that legal recourse is available to holders of DROP and TIN.
DROP & TIN
Based on each NFT pool, ERC20 tokens (TIN and DROP) are minted. These two tokens represent the underlying collateral. DROP is the Senior token with a fixed interest rate and stable returns, loss protected by TIN. TIN is the Junior token with higher yield and risk; takes loss first. You can read more here.
NFT
Non-Fungible Token as a digital representation of a single unique collateral, IE one invoice. The Centrifuge business NFT follows the ERC-/EIP-721 Ethereum standard.
Revolving Pool
A pool that funds assets continuously; a revolving pool grows/shrinks depending on the balance of investor interest and assets which need to be financed.

Index - Tinlake Terms

Pool Value
Total pool value calculated as: sum of Asset Value and Pool Reserve.
Asset Value
The Asset Value (NAV) reflects the present value of the outstanding portfolio of financings. It is the sum of the present values of the risk-adjusted expected repayments of all outstanding financings.
Pool Reserve
Amount of currency currently held in the pool that is not currently deployed for financings by the Asset Originator. The reserve is available for financing by the Asset Originator and redemptions by investors.
DROP APR
Annual interest rate (APR) at which the DROP Token accrues interest applied on outstanding financings (compounded secondly).
TIN Risk Buffer
Amount of TIN in relation to the Pool Value. The Minimum TIN Risk Buffer indicates the lower limit and ensures that DROP investors are protected by a certain amount of TIN invested in the pool at any time.
Outstanding Volume
Sum of the debt on all financings in the pool. This deviates from the Asset Value which considers expected repayments and risk-adjustments.
DROP Value
Total value of outstanding DROP tokens at the current DROP token price.
TIN Value
Total value of outstanding TIN tokens at the current TIN token price.
Epoch #
Invest and redeem transactions are locked over a defined period of time ("Epoch") and automatically executed at best effort at the end of this period, adhering to the pools predetermined risk limits such as the Minimum TIN Risk Buffer.
Minimum Epoch Duration
Minimum time of an epoch for this pool during which invest and redeem orders can be locked. At the end of the epoch the locked orders will be executed by the smart contracts. An epoch can also take longer, if no outstanding orders are locked.
Total Epoch Investment Capacity
The investment capacity indicates how much investors can invest before the pool is oversubscribed. It is calculated as the difference between the maximum reserve allowed for this pool and currently locked invest and redeem orders.
Available for Financing
The value of the underlying collateral determines how much an Asset Originator can finance against a locked NFT. An Asset Originator may choose to finance less than the available amount.
Risk Group
The risk group of a financing determines the interest rate based on the underlying scorecard.
Maturity Date
Expected repayment date for the outstanding financing. It is used to calculate the present value of the financing for the pool's asset value.
Financing Fee
Annual interest rate (APR) at which the interest for the outstanding financing is accrued with secondly compounding.

Investing in Tinlake

Do I need to KYC/AML for every Tinlake pool I want to invest in?
When I invest in DROP, does my balance of DROP change or does the exchange rate for Dai change as my investment accrues principal and interest?
Can I transfer my DROP token?
Can you explain Centrifuge’s token structure? I see CFG, TIN and DROP. Why are there three tokens?
Is TIN available for investors?

Originating Assets through Tinlake

What kind of collateral do you support?
How do I repay my debt?

Using Centrifuge Chain

Who is responsible for the custody of the real world asset which is the underlying asset of the NFT token. If the real world asset got sold, how can we legally enforce that it will be notified?

Risk Assessment

Who verifies for the asset before the NFT is issued?
What is the collateralization level on the NFT portfolio relative to the loan amount?
How is a pool priced? Both at an initial issuance and later during the pool's life?

About Centrifuge

Can you share some information about the team as well?

For Developers

Is Tinlake open source?