GOBLIN Hedge Fund
  • 💼1. ChinaAI
  • 🌎2. Overview
    • 2.1 How it works
    • 2.2 What are CDOs?
    • 2.3 What problem is ChinaAI solving?
    • 2.4 What's the solution?
    • 2.5 Who underwrites the SPV?
    • 2.6 What’s the magic?
    • 2.7 How are AI agents integrated?
    • 2.8 What Basel regulation do we leverage?
    • How far along are we?
  • 🫵3. Investor Perspective
    • 3.1 What is $BRICS?
    • 3.2 Protocol mechanics
    • 3.3 Tokenomics
    • 3.4 How ChinaAI makes money
    • 3.5 $BRICS's fair value
  • 🔬4. Business model and landscape
    • 4.1 Who are the target buyers?
    • 4.2 What are the legal requirements?
    • 4.3 List the licenses ChinaAI has
    • 4.4 Why are we launching with South African banks?
    • 4.5 How we scale across BRICS nations?
    • 4.6 How TradFi addresses credit gaps for exporters today?
    • 4.7 Who are our competitors?
  • ⛓️5. Why blockchain? Why now?
  • 🏦6. Why local banks?
  • 🦾7. Credit enhancement features
  • 🦢8. Dealing with Black Swan events
  • 🫀9. The team
    • The Founders
    • Why are we going to win?
    • BRICS bank partners
    • Who writes code?
  • Appendix
    • What is the BIS?
    • How are BIS capital charges calculated?
    • Do you ever deal with actual borrowers?
    • What companies are referenced in the CDOs?
    • What tech stack are we using?
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  1. 2. Overview

2.4 What's the solution?

On-chain synthetic CDOs

Previous2.3 What problem is ChinaAI solving?Next2.5 Who underwrites the SPV?

Last updated 3 months ago

ChinaAI introduces a tokenized synthetic CDO to address the root cause behind USD illiquidity within BRICS: capital charges that traps surplus cash within bank as a means of credit risk protection. In turn, $BRICS transfers that risk to token investors: providing compliant credit risk mitigation for banks and profitable governance tokens for investors.

Key benefits:

  • For originating banks: $BRICS provides credit risk protection, unlocking regulatory capital through a sovereign guarantee, ensuring compliance with Basel III/IV regulations.

  • For investors: $BRICS enables arbitrage of excessive BIS capital charges via a compliant 2-swap structure. This enables a fundamentals-driven cash flow for investors while simultaneously granting censorship-resistant governance rights on-chain. Section 2.1 illustrates the minimum viable structure.

Fair and Public Token Launch:

A cornerstone of ChinaAI’s governance model is the fair and public launch of the $BRICS token. Unlike traditional solutions, no pre-allocations are made to insiders (Venture Capital, partner banks, or Private Equity) ex-ante. This approach ensures equitable distribution of governance rights and compliance with banking regulations, which prohibit concentrated equity control by banks and core institutional players.

Why Fair Launch Matters:

The fair launch mechanism ensures:

  1. Censorship-Resistant Governance: Governance remains decentralized, allowing equal opportunity for participation from banks, retail token holders, and other stakeholders.

  2. Public Participation: Members of the public can actively engage in governance and benefit financially from the arbitrage opportunities enabled by $BRICS. This is in keeping with the public mandate of the Financial Cooperative Institution.

  3. Transparency and Trustlessness: The on-chain design ensures trustless execution and prevents conflicts of interest prevalent in traditional financial systems.

  4. Compliance: By offering fair distribution of governance rights, ChinaAI ensures adherence to Basel-compliant governance frameworks, enabling scalable adoption by parties that have been severely curtailed otherwise, banks and underwriters.

The "fair launch" mechanic is elaborated in Section 3.3.

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$500 million