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Description
MakerDAO Forum Post: https://forum.makerdao.com/t/rescheduled-focus-on-12-centrifuge-indenture-trust-agreement-deep-dive/15262
For the 12th episode of Focus On, we hosted a joint discussion by Centrifuge and the incubating Legal & Transaction Services Core Unit to explore the progress made regarding Centrifuge’s legal structure.
This is an exciting update for the teams onboarding real-world assets. The Indenture Trust Agreement these teams have been developing is open source, reusable, and adaptable by anyone in the Maker Ecosystem. This agreement creates a pathway for Centrifuge, and potentially other RWAs, to build a sound foundation that scales the financing of RWAs.
Eli Cohen @elidco - General Counsel of Centrifuge & Christian Petersen @christiancdpetersen from LTS co-led this discussion. The team discussed:
-What is the goal of the agreement
-How the agreement works in practice
-How the structure will scale real-world assets for both Centrifuge and MakerDAO
Note: the first 8 minutes of this call was lost to a technical issue.
A
B
A
B
A
A
A
B
A
A
Have
that
ability,
whether
you
exercise
it
or
not
as
a
completely
different
question
and
will
depend
on
facts
and
circumstances
at
the
time?
But
if
you
don't
have
the
ability
to
control
the
assets,
then
you
really
don't
have
much,
because
you're
entirely
wholly
dependent
on
the
borrower
who's
in
trouble.
The.
B
A
A
One
of
the
key
features
that
we
added
to
the
overall
structure
is
what
we
call
a
lock
box.
That's
nothing
unique!
It
is
basically
when
eligible
assets
make
payments,
so
you
know
principal
and
interest
or
what
have
you
those
go
into
an
account
that
is
secured
in
favor
of
the
trustee
again,
I
think
the
reason
we
would
be
doing,
that
is
when
things
go
bad.
A
The
way
that
the
trustee
has
what
is
called
a
security
interest
over
cash
is
by
you
know,
having
a
lock
box
now
how
you
structure
that
lock
box.
You
know
whether
it's
in
the
name
of
the
trustee,
whether
it's
in
the
name
of
the
svv
and
pledge
to
the
trustee
it's
kind
of
the
same.
But
the
fact
of
the
matter
is
that
you
have
cash
coming
from
the
eligible
assets
into
a
designated
account
such
that
when
things
do
go
bad.
A
B
A
A
B
A
B
A
What
the
delaware,
statutory
trust
is
it's
a
very,
very
u.s,
centric
concept,
whereas
a
trust
is
that
in
and
of
itself
is
is
actually
very
common
law
centric.
So
you
know
the
french,
don't
necessarily
have
the
same
concept
as
a
trust
that
the
english
do.
So,
if
you
look
at
civil
law
jurisdictions
that
really
doesn't
really
work
as
well,
so
even
the
concept
of
a
trust
whether
statutory.
A
A
You
will
have
if
you've
attended
any
of
the
real
world
financing
presentations
to
date.
You
know
we
go
on
and
on
about
cash
waterfalls
and
what
cash
waterfalls
basically
are.
Is
cash
gets
trapped
in
this
lock
box
and
there
is
then
a
priority
of
payments
so
who
gets
paid?
This
is
all
still
in
dollars
who
gets
paid
first,
because
you
want
to
make
sure
that
the
trustee
gets
paid,
because
if
the
trustee
is
not
getting
paid,
the
whole
thing
falls
apart,
because
the
trustee
will
say,
hey
you
haven't
paid
me.
A
I
quit
you
want
to
make
sure
that
the
servicer
of
the
underlying
assets,
usually
in
this
case
it
would
be
the
parent
who's
servicing
these
eligible
assets.
You
want
to
make
sure
they
get
paid
right.
So
they'll
probably
have
a
servicing
fee
of
some
type,
because
if
they're
not
servicing
the
assets,
then
there's
no
cash
to
pay
you
as
the
bondholder.
So
you
want
to
make
sure
that
the
servicer
is
getting
paid.
A
You
want
to
make
sure
that
any
other
kind
of
important
participants
in
the
if
you
will
real
world
or
everything
before
things
are
converted
into
die.
You
want
to
make
sure
that
they're
getting
paid
so
that
the
system
continues
to
work
right.
Those
those
expenses
need
to
get
paid
first
and
then
at
kind
of
the
bottom
of
the
waterfall.
If
you
will
funds
then
can
go
into
the
tin
lake
protocol
and
pay
the
the
tin
and
drop
token
holders.
So
that's
one
thing
that
we've
we've
instituted
in
the
past
on
a
smaller
deal.
A
You
know
funds
go
into
the
spv
and
the
spv
just
manages
things
right.
Okay,
that's
fine!
That's
that
works
for
a
20
million
dollar
financing.
But
you
know
once
once
you
start
getting
into
bigger
numbers
and
you
try
to
create
more
structure
and-
and
this
all
seems
very
heavy-handed.
But
actually,
if,
if
you
think
about
hey
and
we
eric-
and
I
eric.
A
Discussions
on
kind
of
decision
making
and
delegated
committees
public
investment
grade
securitizations
are
exceptionally
decentralized
because
everything
has
been
delegated
out
to
an
independent
third
party.
To
do
things
such
that
the
drop
in
tin
token
holders
or
the
bondholders
actually
don't
do
much
and
don't
have
to
do
much
and
if
they
do
have
to
do
something
it's
because
because
the
deal
is
going
really
really
south.
A
So
in
a
way,
even
though
it
seems
like
you
know,
we're
creating
we're
creating
work
in
doing
so,
we're
actually
trying
to
make
the
start
we're
trying
to
imitate
what
traditional
finance
has
done.
A
very
good
job
at
is
making
these
types
of
securitizations,
exceptionally
decentralized,
and
from
a
bondholder
perspective.
A
You
know
what
people
are
going
to
do,
because
their
roles
and
responsibilities
and
the
flow
of
cash
is
precisely
defined.
There's
no
discretions!
There's
nobody
that
really
needs
to
say
hey!
You
know!
Do
I
want
to
do
this
or
not?
Should
I
make
this
payment
or
not?
It's
set
forth
very
clearly
who
gets
paid.
How
much
when,
who
makes
the
payment
without
having
to
go
back
to
you,
know
lots
of
bondholders
and
say:
hey?
Should
I
make
this
payment
or
not
so
so?
The
the
lock
box
was
one
aspect
that
we
we
entered.
B
A
B
B
A
Fraud
vector
frankly-
and
you
know
so-
you
have
a
third
party-
checking
the
eligible
and
checking
the
assets
to
make
sure
that
they
satisfy
the
requirements
and
just
as
a
point,
this
is
exactly
what
we're
doing
in
the
huntington
valley
bank
transaction,
where
the
trust
is
engaging.
A
third
party
to
confirm
huntington
valley
bank
will
bring
an
app
a
a
participated
loan
and
say
hey.
I
want
to
sell
this
loan
to
the
the
trust
and
we
have
a
third
party
look
at
the
quality
of
the
loan.
A
B
A
A
A
Much
like
going
to
you
know
ten
thousand
bondholders
of
a
ford
motor
credit.
You
know
credit
corporation,
you
know
five
billion
dollar
bond.
You
know
going
back
to
all
the
bondholders,
for
every
little
decision
just
doesn't
make
any
sense.
So
we've
said
okay,
you
know
what
are
those
things
that
really
need
to
go
back
to
the
bondholders,
in
this
case
the
ten
and
the
drop
for
decisions
and,
as
we've
indicated
in
our
prior
presentations
in
the
delegated
committee,
these
are
kind
of
the
sacred
rights
and.
A
Of
a
security
interest,
a
restructuring
of
the
underlying
debt,
you
know
so,
let's
say
there
is
a
default
and
the
spd.
The
its
business
has
been
a
not
a
complete
failure,
but
it's
been
a
failure
enough
that
it
can't
repay
the
debt.
Okay.
Well,
you
know
if
the
bonds
were
supposed
to,
you
know
be
paid
owed.
A
There
was
an
assumption
that
the
the
bonds
would
be
paid
at
a
certain
period
of
time,
but
there's
no
longer
the
cash
to
do
that.
You
know.
How
do
you
restructure
the
debt?
You
know?
Maybe
you
need
to
change
the
interest
rate
change
the
term.
You
know
what
have
you
and
we've
tried
to
identify
those
type
of
decisions
that
would
go
back
to
the
bondholders
and
then
for
any.
B
B
B
A
B
Yeah,
I
I
just
said.
Obviously
we
agree
that
the
bond
structure,
I
think,
is
a
very
good
fit
with
the
with
the
with
the
dow
and
with
the
decentralized
community
like
maker,
because
in
a
bond
deal
the
bond
holders
don't
know
each
other.
Even
the
issuer
usually
doesn't
know
who
the
bondholders
are,
so
it
is
in
fact
kind
of
a
decentralized
structure
already
existing
in
the
tradified
world.
So
it
fits
very
well
with
the
maker
community
and
the
concept
of
a
decentralized
tao.
So
that's
why
we
went
that
with
that
approach.
B
I
think
that
the
the
the
use
of
a
trustee,
the
interposition
of
a
trustee
between
the
decentralized
community,
whether
bondholders
or
or
dao
and
and
the
issue
where
it's
up
issue
or
spv
is,
is
really
critical
to
to
making
this
all
work.
And
I
think
that
you
know
with
looking
at
real
world
asset
deals.
The
community
really
needs
to.
B
Should
you
know
it's
a
great
idea,
as
christian
has
said,
to
focus
on
the
powers
and
the
roles
and
responsibilities
of
the
trustee
and
when
things
need
to
come
to
the
community
for
a
vote
and
when
the
trustee
can
act
on
its
own
and
you
you
want
obviously
the
trustee
to
have
a
scope
of
authority
which
is
limited,
but
not
too
limited,
because
you
don't
want
to
have
to
put
everything
up
for
a
vote.
I
mean
much
like
an
on-chain
vote
within
a
dow.
B
A
bondholder
vote
is
a
difficult
thing
to
manage
and
organize-
and
you
know,
finding
the
bondholders
and
getting
them
to
vote.
It's
actually
more
difficult
than
a
non-chain
decentralized
dow.
So
you
know
it's
it's
something
that
the
trade
5
world
has
has.
You
know
has
a
long
experience
in
and
it's
it's
something
that
it's
very
easy
for
for
a
towel
and
pit
maker
to
piggyback
off
that
experience
in
the
tradified
world,
and
that's
that's
really
what
what
christian
and
I
have
tried
to
do
with
this
structure.
A
B
A
A
But
you
know
people
are
are
certainly
free
to
use
it.
It
will
vary
slightly
from
deal
to
deal
we'll
continue
to
improvise
on
it.
I
think
people
should
expect
us
to
continue
to
improvise
on
it
and
which
really
brings
me
to
my
next.
My
next
point,
so
it's
going
to
be
a
bit
of
a
pitch
for
the
incubating
legal
and
transactional
services
core
unit.
I
mean
one
of
the
reasons
that
I'm
here
is
this.
B
A
A
Traditional
finance
and
I
think,
one
of
the
things
that
certainly
is,
I
I
get
into
these
agreements
and
think
about
maker
and
think
about
how
to
improve
things.
And,
frankly,
I
think
the
tin
lake
protocol
is
is
a
great
example
of
that,
because
they've
taken
a
part
of
this
entire
process
and
automated
it-
and
you
know,
I've
had
various
discussions
over
time
with
the
centrifuge
team
to
kind
of
say:
okay,
where
else,
how
else
can
we
improve
the
contracts?
How
else
can
we
automate
things?
A
A
Meaningfully
experiment
and
frankly,
force
borrowers
to
experiment,
because
borrowers
just
want
cash
right,
I
mean
they
want
to
get
on
with
their
business.
I
get
that,
but
you
know
maker
has
a
philosophy
of
decentralization
open
source
trustlessness
that
that
it
wants,
I
believe,
to
you,
know,
drive
how
it's
interacting,
and
you
know
I
think,
for
instance,
this
trust
agreement
would
be
one
of
those
documents
that
you
kind
of
said
yourself.
Okay,
you
know
how
do
we
from
from
a
maker
standpoint?
A
A
B
A
With
with
centrifuge,
because
I
think
they
you
know
the
tin
lake
protocol,
they
clearly
saw
that
need
to
automate,
and
you
know,
there's
lots
of
different
points
along
this
chain
where
we
can
begin
to
automate.
Obviously,
the
biggest
part
where
we
can
begin
to
automate
is
the
us
dollar
lock
box,
and
one
of
the
first
questions
that
I
had
for
centrifuge
back
in
november
is:
does
your.
A
A
bank
account
in
dollars
and
unfortunately
it
doesn't
right.
It
works
for
dye,
but
you
know,
frankly,
why
can't
we
automate
the
lock
box?
I
mean
when
you,
when
you
think
about
a
cash
waterfall.
A
cash
waterfall
is
if
a
then
b,
if,
if
b
then
c
and
it's
just
you're
going
down
a
water,
you
go
you're
going
down
a
prioritization
and
if
there's
enough
cash
to
pay
those
payments,
then
you
pay
them.
A
B
Just
just
to
add,
I
mean
I
think
that
you
know
this,
this
work,
that
it's
really
you
and
I
that
did
this
work
for
them,
this
adventure
and
and
pretty
much
just
you-
and
I
you
know
it's
it's
it
is,
you
know,
you're
being
a
bit
modest
this.
The
adventure
that
we've
created
is
is
something
unique
and
it's
it
is
very
innovative.
There's
nobody
else
doing
this
in
this
space
right
now.
Nobody
else
has
got
a
you
know
a
trusty
arranged
structure
with
a
lockbox
for
for
a
tokenized
real
world
assets.
B
Yet
I
mean
I
think
this
will
be
the
the
model.
I
think
this
should
be
the
model
going
forward
because
it
is
providing
like
a
full
level
of
traffic
investor
protection
in
a
way
that
most
everything
else
you
see
in
the
rwa
space
just
does
not
so
you
know,
I
think,
don't
be
too
modest.
This
is
it's
a
big
step
that
we're
doing
and
if
we
can
get
this
implemented
in
a
real
deal,
it's
gonna.
It's
gonna
change
the
way
people
think
about
the
space.
A
Yeah
so
there
there
were
a
couple
questions,
so
one
of
the
so
I'm
going
from
the
top
of
my
screen
to
the
lower.
So
so
it
says
what
are
the,
what
are
the
trustees,
pre-default
duties
compared
to
a
dst
structure
and
how
will
it
protect
maker
dial
and
how
would
those
pre-default
duties
differ
from
country
to
country?
B
A
A
A
A
Details
right
because,
if,
if
the
trust,
whether
it's
a
delaware,
statutory
trust
or
an
inventor
trust,
if
the
trust
basically
says
you
trustee
only
do
one
thing
and
one
thing
only
well:
that's
the
only
thing
that
trustee
will
do
if
the
indentured
trust
or
the
delaware
statutory
trust
says
you
trust,
do
trustee,
do
a
b,
c
d,
e,
f
and
g.
Well,
those
are
the
those
those
are
the
only
things
that
the
trustee
will
do.
So
it
really
depends
on
the
actual
text.
A
B
A
Going
to
have
a
delaware,
statutory
trust
in
luxembourg
or
jersey
or
guernsey
or
the
uk,
or
you
know,
bvi
you'll
have
a
trust,
but
by
and
large
this
is
now
a
very
broad
statement.
You
know
parties
can
contract
and
have
the
right
to
contract
and
have
courts
respect
their.
You
know
what
they've
agreed,
so
it
should
generally
be
the
same
as
you
know,
as
long
as
courts
respect
what
people.
A
B
B
Yeah
yeah,
I
mean
I
think
there
may
be
some
jurisdictions
that
will
have
some
regulatory
responsibilities
placed
on
the
on
the
trust
of
the
trustee.
It
will
be
a
little
bit
different
than
you
might
find
in
in
delaware,
but
for
for
the
most
part,
I
would
think
that
those
duties
should
be
pretty
similar
and
pre-default.
I've
seen
a
default
situation
that
it
will
be
a
very
different
situation,
because
the
default
processes
and
countries
outside
the
united
states
will
be
different.
A
B
A
B
Well,
except
if
the
job's
been
paid
off
exactly
yeah
yeah,
I
mean
it's
and
I
would
say
it's
more
than
just
a
contractual
claim,
because
one
of
the
elements
that
we
didn't
actually
talk
about
earlier
is
that
there's
pledges
of
the
assets
so
the
assets,
the
underlying
assets
that
the
spv
holds
and
also
the
interest
in
the
spv
itself
from
the
parent
are
both
pledged
to
the
trustee
so
that
they
have
an
interest
in
the
property.
They'll
have
a
secured
interest
in
in
the
property
underlying
the
sbb,
the
assets
themselves
and
in
the
default
situation.