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+---
+cgp: 137
+title: Seeding Untangled institutional private credit pool on Celo 
+date-created: 2024-05-15
+author: "Manrui Tang, Quan Le"
+status: DRAFT
+discussions-to: https://forum.celo.org/t/proposal-for-allocating-5m-from-the-celo-community-fund-to-rwa-lending-pools-with-untangled-protocol/6100
+governance-proposal-id:
+date-executed:
+---
+
+## Overview
+Untangled is an institutional-grade private credit platform for fintechs worldwide. The protocol has pioneered the first RWA credit oracle infrastructure, enabling dynamic pricing of RWAs with AI-driven risk models and zero-knowledge proof technology. We built Untangled on the conviction that much of RWA financing will be tokenized, requiring robust credit infrastructure to scale.
+Following our initial deployment to the Celo mainnet in October 2023, we are pleased to announce that our first pool, the Karmen Mezz Unitranche Pool, went live on May 2, 2024. This pool is currently raising $600,000 in USDC through the issuance of Mazz tokens, which are backed by French working capital assets in a traditional securitization structure based in Luxembourg, with Fasanara acting as the Senior Lender.
+This initial pool will be followed by the launch of the Fasanara Diversified Fund Pool and the Zvillo Invoice Finance Pool.
+We request your support in granting $200,000 worth of cUSD from the Celo Community Fund. This grant will be used to participate in initial lending pools. These RWAs are originated by proven asset originators who have already been funded by Fasanara, an institutional asset manager regulated by the FCA in the UK.
+
+## Motivation 
+**Describe the issue that motivates this CGP. It should indicate all parameters that are being changed and why doing so is important.**
+
+As the market for tokenized assets continues to expand, forecasts indicate a potential growth to $10 trillion in an optimistic scenario and $3.5 trillion in a conservative estimate, according to the digital asset manager 21.co. In response to this burgeoning opportunity, Untangled is poised to introduce a unique RWA offering, structured around three foundational pillars:
+
+**Source high-quality private credit** that can bring high risk-adjusted yields and impact. We collaborate and co-invest with established financial institutions to bring thoroughly vetted assets on-chain. By doing so, we offer these attractive investment opportunities, previously available only to these institutions, to DeFi investors
+**Ensure robust legal structure** for token issuance: This involves a SPV holding collaterals backing up the real world lending. The legal structure is based in Luxembourg, a jurisdiction that is well recognised by institutional investors. 
+
+**Build a rigorous credit pricing and monitoring**: we are developing the first on-chain credit oracle infrastructure that allows for dynamic pricing and continuous monitoring of collaterals. This infrastructure utilises Zero Knowledge Proof, AI modelling, and integrates Chainlink’s PoR. Our first PoC will shortly be operational on the Celo blockchain.
+
+**Explain what benefits the enhancement this change will bring. To the extent possible, enumerate use cases affected by this CGP.**
+**Network growth:** Our proposal aligns with Celo’s vision as the home of Regenerative Finance (ReFi) by supporting greener, real-world economies. The launch of these pools will bring a new standard in on-chain real world lending, a first on Celo. Together with other developments such as USDC’s eminent deployment and Celo L2, this could usher a new wave of use cases on the Celo network, attracting institutional investors and sophisticated investors alike.
+
+**Return/TVL:** Given the limited yield opportunities currently within the Celo ecosystem and wider crypto space, we believe that yield solutions like Untangled could provide much-needed alternatives. 
+
+**Strategic alignment:** This proposal has been structured as a grant due to potential difficulties for the CCF to extend a loan directly to Untangled pools, due to legal reasons or otherwise. The protocol is however working on a pre-farmed strategy, where, upon a launch of the protocol’s governance token, a portion of token supply will be allocated to early liquidity supporters. This will help align interest between CCF and Untangled, paving the way for CCF’s direct lending to Untangled pools when regulatory impediments are resolved. 
+## Proposed Changes
+**Fill out the following template for each transaction in the proposal**
+
+A multisig wallet hosted on Safe will be employed to manage and deploy the funds, requiring a 2 of 3 signature threshold. The multisig wallet is at 0xE35A476Ac46c34C15d90C6b2efd3FAFAFB815BeB and can be found here. The signers for this multisig are:
+- Manrui Tang (Untangled)
+- Isha Vashney (Celo community member)
+- Quan Le (Untangled)
+## Verification
+All of the funds will be used to provide liquidity in Untangled’s pools on the Celo blockchain. This can be verified through each pool's wallet address. Untangled will also provide monthly updates to the Celo Forum, informing them of the progress in utilising the funds.
+## Risks
+Highlight any risks and concerns that may affect consensus, proof-of-stake, governance, protocol economics, the stability protocol, security, and privacy.
+There are potential risks associated with this proposal, and we have outlined mitigation strategies for each:
+- **Credit/Counterparty Risk:** We will source collaterals from originators with proven track records with institutional investors. All initial RWA pools deployed on Celo are co-invested by Fasanara. In our first pool, the originator has provided an credit enhancement over interest payment
+- **Liquidity Risk:** The absence of a secondary market for this type of token could lead to liquidity challenges. However, this can be mitigated through a backstop liquidity facility (at a cost) and new investors joining the investment. In our first pool, the originator has committed to initially fulfil 200k USDC of redemption requests
+- **Smart Contract/Cybersecurity Risks:** Our contracts have been audited by Verilog. Please see our latest audit report dated April 8, 2024.
+
+## Useful links 
+- [https://docs.untangled.finance/docs/user-documentation/welcome-to-untangled](https://docs.untangled.finance/docs/user-documentation/welcome-to-untangled)
+- [https://app.untangled.finance/#/](https://app.untangled.finance/#/)
+- [https://github.com/Verilog-Solutions/.github/blob/main/Audit/Untangle_Protocol_Audit/Untangled_FInance_Audit_Report.pdf](https://github.com/Verilog-Solutions/.github/blob/main/Audit/Untangle_Protocol_Audit/Untangled_FInance_Audit_Report.pdf)
+- [https://www.coindesk.com/business/2024/05/02/tokenized-private-credit-platform-untangled-opens-its-first-usdc-lending-pool-on-celo/](https://www.coindesk.com/business/2024/05/02/tokenized-private-credit-platform-untangled-opens-its-first-usdc-lending-pool-on-celo/)
+- [https://forum.untangled.finance/t/issuer-fasanara-capital-karmen-mezz-unitranche-token/41](https://forum.untangled.finance/t/issuer-fasanara-capital-karmen-mezz-unitranche-token/41)
+

CGPs/cgp-0137/mainnet.json

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