Benjamin Sarquis Peillard - NEXUS

1. Leveraging Crypto Assets for Yield Generation

Benjamin emphasized the innovative approach of utilizing Bitcoin, ETH, and alternative asset holders to underwrite activities of regulated financial institutions in order to generate yield. By allowing these asset holders to vouch for institutions they trust, CAP creates a system where they can earn a fixed yield expressed in US dollars, rather than relying on token inflation. This method not only harnesses the value of alternative assets but also connects them with productive financial activities, establishing a significant yield source.

2. Differentiated Yield Sources from Unsecured Credit

Benjamin pointed out that the primary yield in traditional finance often derives from debt, notably unsecured credit. In the crypto space, this premium can reach 12% to 15%. CAP’s unique proposition lies in marrying the most productive asset, the US dollar, with highly scalable yield sources from unsecured credit, which stands in contrast to the traditional models where yields come from securitized assets or over-collateralization.

3. Focus on Automation and Smart Contracts

Benjamin stressed the importance of technology by noting that CAP has removed human decision-making from the equation, relying heavily on smart contracts. This approach reduces the risks often associated with unsecured lending through human intermediaries. By leveraging smart contracts, CAP ensures that the lending process is efficient, reliable, and secure, mitigating the risks of past volatile market behaviors.

4. Retail User Engagement Simplified

For retail users, Benjamin outlined that CAP aims to simplify engagement with their protocol. They will focus on providing a user-friendly experience where individuals can experience marginal yields above treasury yields without needing to understand the complexities of the underlying mechanism. This approach is imperative for attracting new adopters into the crypto space, especially those hesitant about involving themselves with DeFi complexities.

5. Connecting to Diverse Liquidity Sources

Looking ahead, Benjamin shared that a significant focus for CAP is on connecting to various sources of liquidity across both the Bitcoin/ETH and US dollar sides. The strategy involves collaborating with DeFi platforms and traditional money market funds to enable their assets to be utilized for lending and borrowing within CAP’s ecosystem. This two-pronged approach is set to enhance both liquidity and accessibility for users of the protocol.

6. Addressing Risk Within Their Mechanism

Benjamin acknowledged several risks within their operational mechanism, notably the reliance on decentralized marketplaces and the quality of collateral. CAP’s commitment to using established cryptocurrencies like Bitcoin and ETH aims to ensure stability and minimize risk. He emphasized the importance of diligence in asset selection to maintain trust in the lending process and reduce exposure to high-risk assets.