We are live from Definition by Accountable at Token 2049 in Singapore. Joining me ahead of his panel on private credit is Pramodya De Alwis, Co-Founder and CEO of Spice Protocol. Welcome to Fintech TV.
Thank you so much. Good to be here.
For viewers meeting Spice for the first time — what does this protocol do?
When we first started Spice, there was a big problem with off-chain verification. Accountable does on-chain verification well and is getting there with off-chain too — but there is a lot of integration to be done. We have hyper-focused on the private credit side. Private credit loan origination has a long way to go for verification in general, without even thinking about on-chain and off-chain. General credit verification is still lacking. What we have done is essentially built digital credit — a way to verify off-chain deals just like you would on-chain.
What does bringing private credit on-chain make possible?
We are looking to launch a yield-bearing stablecoin — and that gives you interesting side effects powered by DeFi. You get secondary market liquidity, instant redemptions, and lending. Normally to access those things you have to talk to Goldman Sachs or some other big bank and hope they like you enough. The product has to go through their due diligence process, go to Moody’s, go through all those risk rating companies. It gets complicated really quickly. And retail or small institutional investors simply cannot get plugged in. On-chain we can replicate what traditional finance guys take for granted — and do it instantly.
Who are the borrowers and lenders you are bringing together?
Our borrowers are mostly property developers — people with first mortgage lending books who want alternative sources of capital and a nice uplift. Even a 0.5% uplift helps them greatly, especially out of Australia. Australian rates are going up, the margins between the US cash rate and the Australian cash rate are getting bigger. Borrowers in Australia struggle to go through normal banking rails — it takes too long. They go through private credit lenders. But private lenders depend on banks. We work with those guys and help them get funding through on-chain stablecoin rails. Our lenders are on-chain people — stablecoin holders. And when we launch the yield-bearing stablecoin, it will be a product you can jump in and out of — something you cannot do in normal traditional deals.
What needs to become standard for this market to scale?
This is where digital credit comes in. We have built August — a private loan management stack that handles the entire process from when the borrower says they need money all the way to final completion when they pay back principal and interest. Along the way, we embed verifications on-chain through Visio — our custom layer built in-house for private credit. Accountable can then pick up those verifications and show them on their dashboard with ZK proofs. We do not want to reveal to the world exactly how big a drawdown was — but we will show that there is $20 million behind that loan or fund. Proof without full disclosure.
What parts of a deal should always stay tailored to the borrower?
There is a lot of relationship building in this space. You are going through NDAs, making sure you can work together, and if something happens — say the timber does not arrive on time — you do not just say the borrower is defaulting. You work with them. You restructure the loan. You cannot automate that. What we automate through Spice and August is the administrative process. But it is still a human-first product. Relationships are very important and we want to keep it that way.
Where do you think the industry still needs improvement?
In Australia, even with tight regulations, it is hard to audit at regular intervals because of how data is placed. Investors are not investing into some private credit funds because they cannot see into the books. They have to hope they have a large enough position that the fund is happy to share enough information. We do not want that. We do not want the $100 million investor knowing more than the $10 million investor. That information asymmetry is how you get bank runs. Through August and the Visio stack, every lender can verify the LVR, the maximum lock, and the assets — equally.
Are we moving in the right direction?
On the DeFi side — yes, enough to allocate. What is not yet solved is verification of what is on the back end in private credit. DeFi has ZK verifications you can plug into. How do you do that with private credit funds? You cannot. August is built from the ground up to give that level of access.
Thank you very much Pramodya. Best of luck to you and Spice.
Thank you so much. Appreciate it.
