The product in a few words An on-chain financing platform for a new generation of financial products.
What is AmFi?
AmFi is an on-chain financing platform that makes it easy and fast for fintechs to structure, distribute and operate their own financial products. We connect fintechs with local and global investors and implement the best capital market practices to replace bureaucratic processes with code. We're a team of third time founders with over 10 years of experience in fintechs and capital markets.
Who's the team behind AmFi?
The AmFi team has extensive experience and a proven track record in developing innovative technologies for financial services, products and infrastructure in Latin America. We've developed many solutions on Traditional Finance including regulated institutions and B2B/B2C fintechs.
Blockchain provides a better infrastructure to support the development of financial markets in Brazil. It enables the efficient distribution of financial products to global investors and the standardization of credit products through smart contracts. Tokenization of funds flowing into lending pools creates an inviolable, secure and transparent on-chain credit history, perfect for potential investors to analyze and make better investment decisions. Blockchain technology is already being used by major financial institutions such as Nubank, Itaú and BTG Pactual.
Why is AmFi cheaper and faster compared to traditional instruments?
Process standardization and automation is an expertise that the team behind AmFi brings to the table, enabling our pools to be faster and cheaper than traditional lending instruments.
What are the advantages for fintechs?
AmFi provides fintechs with more options and access to liquidity, making it easier for them to structure, distribute, and operate their financial products at scale. AmFi offers a complete package for fintechs that want to set up a new lending business without using their own balance sheet, which is a more professional and scalable approach. For early-stage fintechs, AmFi offers a complete warehousing solution: a ready-to-use structure in which the fintech does not need to set up banking and legal structures. That makes it much easier to raise external capital later on.
What are the advantages for investors?
Through AmFi Pools, investors can access new and improved financial products backed by eligible, verified and auditable tokenized financial assets. This means that the operational performance of the pools is inviolably registered on-chain and can be checked by investors. Moreover, the legal structure of the pools is fully compliant with all regulations. AmFi acts as a link between Agents and Investors by providing a system of eligibility criteria.
What are the advantages for borrowers?
With the optimizations brough by AmFi, borrowers have easier and cheaper access to credit.
How can I participate in AmFi Pools?
There are three ways to interact directly with AmFi:
Agents: businesses with an already established network of client SMEs, and interested in offering banking services to this group or optimizing a financial service they already provide.
Investors: institutional investors interested in fixed-yield on-chain investments backed by real-world financial assets. Currently, AmFi is conducting a closed beta limited to Brazil.
Borrowers: any Latin American SMEs in supported countries accessing capital through AmFi Pools using their available eligible assets as collateral.
Does AmFi provide loans?
AmFi does not provide loans directly, these are done through the pools that are operated by Agents. Borrowers interested in taking a loan in a certain pool must contact the Agent that operates it.
Is AmFi a blockchain?
No, it is not. AmFi is built on the blockchain, starting on the Avalanche network.
The major reasons why we chose Avalanche:
- Low cost and high transaction speed;
- With a high total value locked (TVL), Avalanche is a chain with a lot of protocols and we see an opportunity in making partnerships with some of them;
- Ethereum Virtual Machine (EVM) is the most widely used and supported technology in the market;
- Avalanche is currently one of the most decentralized chains.
How do I follow the AmFi community and updates?
There are several ways to get involved in the AmFi community, and the best ones are:
ABRL is the stablecoin created to enable loans through the AmFi platform and which is pegged 1:1 to the Brazilian real.
What's the Lift Program?
Lift is an ecosystem to support innovation proposals in the National Financial System.
The growing number of participants presenting projects based on blockchain technology shows that regulators support crypto innovation, and AmFi is working with them to develop a secure and sophisticated product. Learn more here.
What's the Next Program?
Next is the largest acceleration program for fintechs in Brazil and is specifically designed for fintechs with high growth potential.
AmFi is one of the eight companies selected to participate in the project. We have undergone mentoring and special training with regulatory experts, making AmFi increasingly aligned with regulators.
How exactly does a pool work? Check out our in-depth presentation on how pools work. What is the currency of the loans? Our first operating market is Brazil, and all loans are to be made in Brazilian real. Investments are currently made in "ABRL", a stablecoin with a 1:1 parity to the Brazilian real, but the pools can also support other ERC-20 tokens.
How is the APY percentage of each pool determined? Each operation has its risk-return profile. A riskier operation will have a higher APY, and a less risky operation will have a lower APY. Are AmFi pools under or over-collateralized? Pools can be both fully or partially collateralized, depending on the Agent portfolio behavior and the RWA used as collateral. Which wallets does the dApp support? The dApp supports Metamask and WalletConnect. Users that are unfamiliar with crypto wallets can use our custodial wallet.
What type of structured facility can AmFi provide its users? AmFi is developing an on-chain credit infrastructure alongside off-chain payments and legal solutions that comply with current local regulations. In this way, the operational experience is as smooth as possible and can be easily executed when needed.
What are the requirements for KYC/KYP?
AmFi develops an on- and off-chain engine validation process and framework so that our protocol can easily operate with the traditional market.
This includes the following:
For Investors: there are different requirements depending on whether the Investor is Brazilian or foreign, individual or institutional. You can access the KYC page here.
For Agents: we extensively screen agents for their ability and experience to originate good credit operations, as well as their reputation and criminal history. If you are interested, please contact us here.
What is the role of the Agent's KYP?
To increase trust in the platform and attract as many investors as possible to the pools, we will have Agents with a verified identity and a bio, which helps to give more visibility and information about the Agent, its history and reputation. AmFi's role is to reinforce trust between the platform's players, ensuring formality and best market practices.
What are "real-word assets"?
Real-world assets (RWAs) are financial assets that can be tokenized and used in digital transactions. Some examples are: contracts, CCBs, and service invoices.
What is tokenization?
Asset tokenization is the conversion of real assets into digital assets using code. Read more about it here.
How are real-world assets and tokenization used on the AmFi platform?
AmFi tokenizes real-world financial assets to provide more stability and security for our agents. In addition, with tokens the process is faster, more transparent and cheaper, as it is entirely done through codes.
What is the AmFi Factory for?
In short, the AmFi Factory is were Agents set the parameters to be used in the pool following the Agent's needs.
The main parameters are:
Assets the pool can acquire and/or use as collateral;
Senior tranche withdrawal time to liquidity (in days);
Initial size of the Pool;
Pool minimum operational capital;
Minimum tranche ratio;
Minimum Junior Tranche capital;
Desired yield for the Senior Tranche.
How many parameters are there to customize the pools?
Currently there are more than 80 fields to be filled in.
How do I set up a wallet?
The most widely used wallet is MetaMask. You can download it, set up your wallet, create a strong password and write down your recovery phrase. Check out the details in our tutorial.
To use our Custodial Wallet, you just need to go through a KYC check. If you do not provide a wallet address, we will create a custodial wallet for you.
What are stablecoins?
Stablecoins are cryptocurrencies designed to maintain price stability relative to other assets, often fiat currencies. For example, each stablecoin paired with a dollar is worth one dollar. They are used to minimize the volatility of crypto assets prices while maintaining the security, speed, and other benefits of transactions on blockchains.
How is ABRL used on the platform?
ABRL is used in all transactions that involve a transfer of liquidity: loans, investments and expenses collection. It also allows platform participants who have passed a KYC (Know Your Customer) check to move their capital between the banking system and the blockchain (on-ramp/off-ramp) in an extremely simple and reliable way.
How can I buy ABRL?
To buy ABRL, investors must go through a KYC process and, once approved, transfer reais via TED to the stablecoin account, which is kept apart from AmFi. Once the transfer is completed, the amount is stored in a smart contract and is available on the platform for that investor to claim as ABRL.
How does ABRL peg work?
Fiat-backed stablecoins have 1:1 parity with a fiat currency. For example, each stablecoin paired with a dollar is worth one dollar. This is the most popular model among digital assets. For it to work, there must be fiat currency in the bank accounts of the issuers of these stablecoins. This is the type of stablecoin used in your protocol. After an investor makes a request and it is approved through MetaMask (wallet used on AmFi), the ABRLs are created and backed by the reais in the AmFi account with a 1:1 peg.
Is it possible to use ABRL outside of the AmFi platform?
Currently, only KYC’d users can withdraw ABRL exclusively through the AmFi platform, and AmFi does not provide liquidity for use of ABRL outside of the platform. But stay tuned. 😏
Who can invest in AmFi Pools? KYC'd institutional investors interested in fixed-yield on-chain investments backed by real-world financial assets. Currently, AmFi is conducting a closed beta limited to Brazil. What cryptoassets can I supply to the Pools?
The Pools accept ERC-20 tokens, but the Pools operating now grant loans in reais, so at the moment we are using ABRL as a stablecoin. What is Tranche Token?
It is like a "digital receipt" that represents how much you have supplied to the pool. What is the difference between Junior Tranche and Senior Tranche? In short, the Junior Tranche is exposed to most of the risk, while the Senior Tranche has a capped (limited) APR but is much less risky. Does each investor receive the token at the same value?
The pool starts with a fixed number of tokens issued between junior and senior tranches as decided by the Agent.
The pool starts in funding status and is only able to start operation after a minimum funding volume (also indicated by the Agent) is reached. During funding, all investors enter the same initial amount (1 ABRL/token).
After the operation starts, the price of the tokens changes according to the performance of the pool, so new investors who buy remaining tokens will pay more (or less) depending on the performance of the Agent in the pool operation. For a senior tranche with an annual payment promise of 12%, the token value starts at 1 ABRL and starts to increase as soon as the pool starts operating (after one day of operation, the token value is 1.0003 ABRL) .
Of course, this increase in value only takes place as long as there are assets in the smart contract PL to support that value. If at some point in time the value of the assets is not enough to achieve this profitability, the value of the token will remain the same until new assets are added.
When do I receive yield?
Senior tokens accrue yield every 24 hours.
Junior tokens increase in value when loans are repaid and the pool value increases.
How long after the investment can I withdraw the funds?
Investors in the Senior Tranche may request a withdrawal at any time.
The funds are available after a predetermined period of time, depending on each pool ("Time to liquidity").
Junior investors follow the same rules, except they cannot be sold if that would violate the minimum tranche ratio configured for the pool.
Why can't a common investor invest in the Junior Tranche?
Only Agents can invest in Junior Tranches to ensure that they have the highest risk exposure and are aligned with the interests of the Pool.
Why do I need to approve transactions before investing?
Token approvals are necessary because they allow the AmFi dApp to transfer your tokens from your wallet to the Pool.
Will we make capital calls with investors according to origination?
There is no capital call. Investors contribute to the pool and the capital is available for the Agent to operate. If an investor wants to increase their position in the pool, they can do so at any time, as long as there are still tokens available (as each pool has a limited amount of tokens, determined at its creation).
How will the SPV accrue investor interest?
Interest is accrued continuously from the beginning of the transaction, according to the debt instrument between the SPV and the Investors. Information on amounts owed/interest is available on the blockchain.
How do you screen borrowers and what happens if they do not repay?
We use documents and data-provider APIs as anti-fraud measures (to ensure borrower identity, asset existence, and asset validity for the pool).
The Agent performs credit analysis on the Borrowers and assets, and credit policy will vary from pool to pool. If they do not repay, the Agent is required to take a variety of actions against the Borrower, and AmFi supports the Agent with services, automation and legal infrastructure to that end.
These may start as simple as a phone call and may go as far as legal action against the Borrower. Ultimately, the business of financing real-world assets is one of the most lucrative and long-standing financial services in Brazil. The use of blockchain simply adds transparency, traceability, and enforceability to the many well-established practices in this industry.
Who can get a loan through AmFi Pools?
Each pool has a different target group, and the kind of borrower and type of operation it finances are described on the page dedicated to that pool.
One pool may focus on individual people financing a large purchase of equipment that the Agent sells, while another may focus on a specific niche of companies (such as schools or truck deliveries) that have a close business relationship with the Pool Agent.
What types of collateral are required to get a loan through AmFi pools?
The type of collateral depends on the pool and is described (along with other information) on the page dedicated to that pool.
The most common are CCBs (credit notes issued by financial institutions) and service invoices.
What is an SPV?
Pool SPV ("Special Purpose Vehicle") is the legal entity that represents the pool. Lending Pool SPV is the set of smart contracts that agents implement in the pool's business rules. Both live together, the point is that for what is on-chain to have legal validity, we need the legal entity.
What is a debenture?
Debenture is a credit instrument used by Pool SPVs to legally raise capital with investors. It’s a fully regulated and compliant lending instrument widely used in securitization operations.
Is AmFi registered and compliant with the recent CVM Resolution 60, which regulates securitization companies?
The securitization company formed by AmFi is not subject to registration with the CVM as it only carries out private offerings and for professional investors.
How are taxes levied on the operation?
The securitization company is responsible for the taxes related to the operations, excluding from the triggering events situations where the taxpayer is not the securitizing company.