Paperchain, a music analytics/fintech company, has announced that together with Centrifuge, a hybrid Ethereum-based on-chain/offchain private by design protocol to connect the global financial supply chain, the successful advance of $60,000 USD in Spotify revenue to a Paperchain record label customer.
The transaction was performed live at DeFi Summit London on stage using Centrifuge’s Tinlake finance application and was originated in less than 30 minutes at a transaction cost of less than $3 USD and at an interest rate 80% cheaper than current revenue advancing solutions.
The transaction is an example showing how decentralized finance (DeFi) technologies can unlock the $100 billion in digital media revenue sitting in 90-day accounts receivable around the world. Record labels and artists will be able to access their streaming revenue faster without being forced into expensive lines of credit or predatory advance deals.
“This is a problem that record labels and artists have been dealing with for decades, and has only been exacerbated by streaming where revenue now pools at the platform level. By pricing the daily streaming data and connecting that to programmatic banking solutions like decentralized finance technology, we can build financial products that get media revenue to creators and other stakeholders at a fraction of the time and cost of traditional finance.”
– Paperchain co-founder and CEO, Daniel Dewar
The components of Centrifuge are a collection of Ethereum smart contracts and a peer to peer network implemented on libp2p. Ethereum smart contracts are used for maintaining identities in a similar format to the ERC725 standard. There is a contract deployed to store state commitments and a standard way of minting NFTs from off-chain Centrifuge documents.
Centrifuge’s Tinlake application is a set of smart contracts that enables borrowers to draw loans against non-fungible assets, such as invoices, royalty payments or warehouse receipts. Anything that can be represented on-chain as NFTs (Non-Fungible Tokens) can be financed using the Tinlake infrastructure. This is done by issuing an ERC20 token, the Collateral Value Token (CVT), against all of the collateral NFTs that are deposited into the Tinlake contracts.
“This pilot is validating our mission and demonstrating how Centrifuge Tinlake can be used by the creative industries to bridge payment gaps. We see the potential in offering financing for a wide range of asset types that can serve the music industry as well.”
– Lea Schmitt, Centrifuge Product Partnerships Manager
The transaction details can be viewed on Etherscan.