💰 Debt Financing Through DeFi
Today's Highlights
- DebtDAO - issuing and trading debt on the blockchain
- This Week On BuzzBelow - a recap on this week's topics.
- In Other News - a few interesting developments we're tracking.
DebtDAO - issuing and trading debt on the blockchain
Right now, debt is one of the big missing pieces from the DeFi universes, and Debt DAO is one of the strongest teams in this space tackling that problem. As on-chain organizations and cash flows proliferate, revenue-generating DAOs will no longer need to sell off their native tokens for working capital. Debt DAO will pull the entire DAO financing ecosystem forward.
DebtDAO is the “Pipe for Crypto” offering revenue-based financing to cryptonative entities like DAOs and protocols with debt financing solutions to improve the efficiency and certainty of their funding stack, establishing a solid foundation for growth, enabling users in the Defi economy to get access to a decentralized, permissionless marketplace to buy, sell, underwrite and manage debt.
Their innovative Spigot smart contract secures borrowers’ on-chain cash flows to automatically repay lenders. Because many DAOs have purely on-chain revenues, the Spigot is able to escrow 100% of cash flows if a borrower defaults. This is the first time on-chain loans have trustless protections for lenders that borrower’s revenue must be used to repay them.
While contributing at DAOs, they saw firsthand the lack of solutions for growth financing. With their extensive experience in DAO treasury management and market research, they have built a peer-to-peer Line of Credit contract to service the dynamic funding needs of growth stage DAOs.
Their Line of Credit smart contract (”line” for short) enables flexible repayment schedules and on demand liquidity. A single borrower’s line can support multiple lenders, multiple assets, and multiple interest rates. This means a DAO can take a loan in ETH and DAI and manage collateral and interest payments all in the same place very easily. It also creates a competitive lending environment where FRAX might try to undercut rates that FEI is offering a borrower or vice versa. The borrower can easily refinance in one transaction because they are all in one contract.
DebtDAO has raised a total of $3.6M in funding.