---
# System prepended metadata

title: Collateral Onboarding Call Summary - Real-World Assets Edition
tags: [Collateral Call]

---

---
tags: Collateral Call
---

# Collateral Onboarding Call Summary - Real-World Assets Edition
October 28th, 2020

## Agenda

- [00:00](https://www.youtube.com/watch?v=gr2irePbjVI&t=0): Intro with Juan Guillén
- [02:26](https://youtu.be/gr2irePbjVI?t=147): Alejandro Gutiérrez and Ernesto from ConsolFreight

## Video

<https://www.youtube.com/watch?v=gr2irePbjVI>

## Introduction

### Juan Guillén

#### Agenda and Preamble
[00:00](https://www.youtube.com/watch?v=gr2irePbjVI&t=0)

- Welcome everyone to another Collateral Onboarding Call - Real World Assets Edition. Today we have ConsolFreight with us. They are going to be presenting the project, telling us how they work, and what they are doing. Then we can go into how this relates to Maker and what are the plans here.
- Discussions about collateral happen in the [Forum.](https://forum.makerdao.com/c/risk/collateral-meetings/23)

## ConsolFreight

- [[CF-DROP] MIP6 Application: ConsolFreight DROP: Tokenized Freight Shipping Invoices](https://forum.makerdao.com/t/cf-drop-mip6-application-consolfreight-drop-tokenized-freight-shipping-invoices)

### Alejandro Gutiérrez and Ernesto

#### Presentation
[02:26](https://youtu.be/gr2irePbjVI?t=147)

![RWA Working Group Update](https://i.imgur.com/FxU2Aq9.png)

![Intro to ConsolFreight](https://i.imgur.com/S1WVkpX.jpg)

![Involved Parties](https://i.imgur.com/SlaLFA7.png)

![We are in a unique position](https://i.imgur.com/TyN6J7n.png)

![Freight Forwarding Invoices](https://i.imgur.com/nylMLoa.png)

![Trade Finance of Cargo](https://i.imgur.com/LNnaLM3.png)

![ConsolFreight and Centrifuge](https://i.imgur.com/Vs59xAS.png)

![Risk Assessment and Pricing 1](https://i.imgur.com/GNU0rKE.jpg)

![Risk Assessment and Pricing 2](https://i.imgur.com/0O91qt3.jpg)

![Previous Pools](https://i.imgur.com/LmJfvSy.png)

![Collateral for Maker](https://i.imgur.com/oeR3lap.png)

![Next Steps with Maker](https://i.imgur.com/qCbsrmA.png)



#### Discussion

- [32:22 - Amy Jung: We have a couple of questions here in the chat. Could you provide a real world example, maybe a short one that we can go through to give more context for people to ask questions and to clarify what remains unclear?](https://youtu.be/gr2irePbjVI?t=1942)
- [37:01 - Juan Guillén: Someone in chat asked if the risk evaluation is done manually. How do you do it?](https://youtu.be/gr2irePbjVI?t=2221)
- [38:10 - Person: You said that in case of default there's a way for you to recompensate... If you get an order from Apple and you've got 10,000 iPhones 12 in there and Apple —for some crazy reason— doesn't settle the invoice within 45 days, you could auction off those 10,000 iPhones 12](https://youtu.be/gr2irePbjVI?t=2290)
- [39:38 - Person: So if the invoice is net 45, you don't deliver the goods until 45 days or before?](https://youtu.be/gr2irePbjVI?t=2378)
- [40:45 - Person: Do you own the trucks and the ships or are you more like brokers?](https://youtu.be/gr2irePbjVI?t=2445)
- [41:43 - Akash: At the end of the day it's a DROP token that's being deposited into the Maker Protocol, right? What's the collateralization ratio or expected collateralization ratio? How does liquidation work? And, from an auction keeper side, we're moving to Auction V2. How does the end buyer of DROP eventually convert back to Dai? So they need to get to real world assets and get back to Dai. How does that process work? What are normal banks charged for this, collateral type? And how is Maker going to be competitive to that rate? How leveraged will the minting of Dai eventually become?](https://youtu.be/gr2irePbjVI?t=2473)
- [45:29 - Akash: When do things go bad and where is the Maker Protocol at risk? How does the auction mechanism solve that risk?](https://youtu.be/gr2irePbjVI?t=2729)
- [48:22 - Juan Guillén: How often is the value of the SPV revaluated and communicated to Maker, if that's the case?](https://youtu.be/gr2irePbjVI?t=2902)
- [49:41 - Akash: Is this being currently used by banks as a collateral or it's just too hard for them?](https://youtu.be/gr2irePbjVI?t=2981)
- [51:08 - Akash: And what about weird externalities. Let's say the ship sinks or something like that. Is there additional insurance that covers that kind of situations? What are the natural holes where Maker could be hurt?](https://youtu.be/gr2irePbjVI?t=3068)
- [52:06 - Akash: What do the ten returns look like? DROP is supposed to be about a 10% return, right? Since it's a high yield product, what kind of returns are those?](https://youtu.be/gr2irePbjVI?t=3126)
- [53:03 - Amy Jung: There's one more question in the chat: How do you prevent scams? For example, getting something worthless as collateral with its risk, and how is it resolved?](https://youtu.be/gr2irePbjVI?t=3182)

## Closing Comment

### Juan Guillén

#### Outro
[55:08](https://youtu.be/gr2irePbjVI?t=3308)

- Thank you, Akash, for the questions. And thank you, Alejandro and Ernesto from ConsolFreight for having joined us. It was really nice having you. Hopefully we helped everyone understanding a little bit more what is happening behind the scenes. Let's keep the discussion going in the forum


## Credits

- @Blimpa produced this summary.
- Everyone who spoke and presented on the call, listed in the headers.