Atlendis Labs Reflects on Fluna’s Pool and Unveils Upcoming Steps
An update on Fluna’s pool: repayment and next steps
The partnership between Atlendis Labs and Fluna has been a resounding success, with Fluna's pool successfully completing five loan cycles. This achievement demonstrates the pivotal role that Atlendis and DeFi can play in the financing strategies of fintech companies. Fluna, in particular, has greatly appreciated the rapid execution of loans, the ease of setting up pools, and the cost-effective financing options provided through Atlendis.
As Fluna's recent loan has been repaid, their current pool will be closed for redevelopment. A new pool will be developed, incorporating Atlendis' latest Revolving Credit Line product and an updated legal framework. Let's delve into the details!
Revisiting Fluna’s Pool
Established in 2021, Fluna is a fintech company that facilitates efficient participation in global trade markets for African importers and exporters. Fluna offers flexible financing solutions to address the specific needs of its clients, and relies on its proprietary data engine to evaluate trade opportunities.
By opening a pool with Atlendis, Fluna found an ideal match for its activities. The funds borrowed from Atlendis were used to finance real-world businesses, including exporters shipping avocados and hibiscus flowers via air or sea freight. The interest paid by the end clients was passed on to Atlendis lenders, allowing them to earn real yields from real-world applications. This demonstrates the true essence of Real World Assets in DeFi, as Lenders can now transparently access asset-backed private credit opportunities harnessing the transparency and efficiency of blockchain technology.
Fluna's pool, established in March 2023, has seen remarkable success over five loan cycles, with a total loan amount of $1.7 million at an average rate of 10.8%. The pool quickly attracted more than 2,200 lenders, resulting in a peak total value locked of over 630,000 USDC. Lenders were able to utilize Atlendis' Revolving Credit Lines product to earn well over 10% APY in average on their USDC, despite lower DeFi base rates during that period.
Over the course of each new loan cycle, Fluna built a solid on-chain reputation and history, earning the trust of its lenders. This trust led to the pool's continued growth and increased rate competition, which benefits borrowers by lowering the borrowing rate.
The success of Fluna's pool has confirmed the pivotal role that the order book structure offered by Atlendis plays in making smart contract-based loans more efficient than traditional funding methods. DeFi offers greater flexibility and efficiency, allowing various participants to directly interact with opportunities in real time.
The success of Fluna's pool was evident to both Atlendis lenders and Fluna's business operations. As a result, Fluna's pool credit limit was increased from 500,000 USDC to 750,000 USDC to enhance its financing capacity.
What's Next for Fluna's Pool
Given the success in all aspects of Fluna's pool, the company is eager to elevate its partnership with Atlendis by transitioning to a new pool.
This new pool will leverage the latest version of Atlendis' Revolving Credit Line product, which offers enhanced flexibility and efficiency. The smart contracts for this version have been recently audited by Nethermind Security.
The new pool will introduce features that allow borrowers to chain loan cycles, ensuring that lenders continue to earn yields uninterrupted. It will also employ a new legal framework involving the creation of a Special Purpose Vehicle (SPV), a bankruptcy-remote legal entity set up to hold collateral in case of default. The collateral will consist of invoices financed by Fluna. Additionally, the new pool will have a higher credit limit, requiring a transition to a permissioned status.
Implications for Lenders
Once the new pool structure is finalized, Fluna's current pool will be closed after the repayment of its existing loan. This closure will allow lenders to withdraw their positions, along with the interest earned.
This aligns with Circle's migration of bridged USDC (USDC.e) to native USDC on the Polygon mainnet. Fluna's new pool will use native USDC, making the existing deposits incompatible with the new target token. After November 10th, Circle will cease supporting USDC.e for on- and off-ramping operations.
Lenders will be able to use the Polygon native bridge to return their USDC.e to the Ethereum mainnet, and Circle partner bridges to transfer native USDC back to Polygon. Further details can be found in the Circle Support article.
After months of fruitful collaboration and a highly successful pool, Atlendis Labs and Fluna are excited to embark on the next stage of their partnership. This new pool aims to blend the best elements of both DeFi and TradFi, providing lenders with a glimpse into the future of financing Real World Assets. Stay tuned for more exciting opportunities with Fluna in the coming weeks!