Unethical startup Untangled launches private credit pool

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Unethical startup Untangled launches private credit pool

The development comes as asset tokenization is emerging as one of the key growth prospects in the digital asset sector, still reeling from a tumultuous bear market and last year's high-profile implosions. Tokenization is the placement of traditional financial assets like credit, real estate, bonds, or real-world assets on a blockchain.

In the next five years, the market of tokenized assets could mushroom to $5 trillion, bringing operational efficiency and liquidity and accessibility for investors and asset managers, Bernstein said.

The Untangled project aims to bring the traditional private credit market, currently more than $1 trillion in size, to blockchains via tokenization. The current size of private credit on decentralized finance rails totals $550 million of assets, according to rwa.xyz data.

Untangled co-founders Manrui Tang and Quan Le, who lead Untangled's startup, said the platform focuses on financial tech lending - for example invoice financing and consumer loans based on salary advances - and so-called 'green assets' like working capital or development loans for green infrastructure projects like battery swapping stations.

Untangled provides infrastructure for blockchain-based credit pools, where investors - in this case, certification investors, firms, and decentralized autonomous organizations - deposit funds to lend and earn a yield. Depositors receive an ERC-20 token that represents their positions.

The platform brings a few novelties among RWA lending protocols, the co-founders said. It has a liquidation engine that can auction off certain collateral assets to boost the pool's overall health if it falls below a certain limit. The company has created a forward-looking credit assessment model that monitors the borrower's future default risks. The protocol also provides an auction-based withdrawal mechanism for investors who want to exit the pools early.

Francesco Filia, CEO and CIO of Fasanara Capital, said he would not comment on the decision.