I think this is great analysis and a really interesting discussion @roman. I wasn’t able to join the call last week due to the holidays, but I’d like to provide an alternative view point here that I think is very relevant.
As a note, I work for Centrifuge, and our team has recently received a grant from Celo to deploy Centrifuge on the Celo network.
I’d like to share the perspective of Centrifuge Prime, a product we developed to solve exactly the problems you mentioned in your post. In simple terms, Centrifuge Prime is a managed services offering that allows DAOs and protocols to setup a compliant and reliable infrastructure for investing in Real World Assets. This includes an out-of-the-box legal framework, risk-analysis from the Centrifuge Credit Group, and dedicated resources facilitating a diversified RWA portfolio. Today, Centrifuge Prime is onboarding the Aave DAO and treasury, is built based on our long-standing experience in MakerDAO, and is actively in engagements with the largest DAOs in the space, such as Arbitrum and others.
First, the premise of allocating the Mento reserve into yield-bearing assets is a critical need. Your approach in identifying crypto native assets as well as real world assets together is a step in the right direction. A healthy portfolio should include yields that provide broad exposure to uncorrelated asset classes, varying degrees of risk profiles (within Mento’s limits), and ultimately balanced against the protocols higher-level organizational objectives and constraints.
However, we think much more can be said on the challenges you’ve identified with RWA.
We strongly believe that KYC/AML shouldn’t be a blocker for a decentralized protocol. The Centrifuge Prime legal framework is a battle tested means of safely solving this challenge.
In a nutshell, the legal framework sets up a conduit structure, integrated with DAO governance, that provides a tool for the DAO to comply with and participate in real world legal agreements. This conduit can be used for KYC/AML needs as well as handling situations of defaults and/or liquidation proceedings in the real world.
This same structure has been developed from our years of experience in Maker,where it today supports >1B USD in assets deployed under Andromeda and the Blocktower MIP6.
We agree that this is a significant challenge for crypto native organizations and even their sophisticated management teams. The analysis and assessment of credit opportunities is simply a different capability that most teams are unable to support.
Over the past year, the Centrifuge DAO has established the Centrifuge Credit Group as a resource to serve our own community. The Credit Group is a set of traditional finance professionals who can be engaged to provide bespoke recurring risk analysis for portfolios, assets, and deal structures and credit arrangements. With a diverse network of experienced and capable resources, the Credit Group can provide communities an additional layer of risk analysis necessary when dealing with credit investments.
Centrifuge Prime brings the relationship with the Credit Group into other communities in a dedicated and ongoing fashion. This capability can be used on an ad-hoc or regular basis, directly to the community or integrated with a treasury management team, and ultimatley can provide a significant value-add to a protocol’s risk management practices.
We agree and we’re happy to report that Centrifuge Liquidity Pools will enable investments to be made directly on the Celo network 
Ultimately, Centrifuge Prime is built to support a diversified portfolio of assets tailored to a protocol’s needs. The platform has available today treasury bills, asset-backed securities, and has a broad pipeline of deals across investment grade and high-yield opportunities. We would be happy to work with the Mento team to originate deals that meet their needs more specifically, relying on our ecosystem of high-quality asset managers and partners.
| Bucket | Description | Target Return | Liquidity |
|---|---|---|---|
| Liquid | Lowest risk while maintaining US Treasuries, MMF, AA+ rated short term bonds | 5-6% | Daily |
| Preservation | Investments in senior secured loans such as real estate, corporate bonds etc. | 6-8% | 3-6 months |
| Acceleration | Trade finance, non-bank originators, emerging markets | 8-20% | 3-24mo |
If the community believes bolstering and diversifying the Mento reserve is in its best interest, and it should, we would love to explore opportunities to onboard the protocol to Centrifuge Prime. This will deepen our ties with Celo and the community, and provide a critical service for bringing RWAs into the reserve, safely and soundly.