Legally orthodox. Operationally certain.
The deal, expressed as state.
Under the Reserve Bank of Australia’s Project Acacia pilot, NotCentralised set out to answer one question: what makes a lending market efficient? The answer became a thesis — and the thesis became a product. YieldFabric is what Project Acacia built.
From the report “Collateralised Lending Markets: A Tokenised Micro-Structure Approach,” by Arturo Rodriguez, NotCentralised.
When loan state, collateral position, trigger compliance, and entitlement are deterministically verifiable — and call rights can be programmatically enforced — the unit economics of structured execution improve materially. Protections that were viable only at large scale become accessible at smaller transaction sizes.
Tokenisation here is not a cosmetic wrapper. It is the expression of financial exposure as deterministic state — preserving existing legal, fiduciary, and regulatory frameworks while removing the operational friction around them.
Robust economics. Fragmented operations.
Private credit markets are economically robust but operationally fragmented. They rely on layered coordination between originators, trustees, banks, administrators, and investors — and the friction comes not from flawed economic design, but from fragmented systems and process-dependent verification.
From representing performance to referencing state.
The distinction is infrastructural. Asset existence, balance evolution, and trigger compliance become mechanically attestable rather than procedurally inferred — and when reference state is reliable, the operational cost of trust declines.
Participants rely on representations of performance — reconciled across systems, inferred from documents, lagged by reporting cycles. Uncertainty lives in the operational execution.
Participants reference the state directly. Historical transitions form an immutable audit trail; entitlement is referenced without reconstructing documentation. Uncertainty shifts to credit performance — where it belongs.
Financial exposure as deterministic state.
Once loans and obligations are state objects, structured funding can be assembled from a small set of non-custodial primitives — each preserving legal rights and trustee authority while compressing the operations around them.
A loan becomes a stateful instrument whose balance, accrual, and status evolve through cryptographically-committed, time-ordered transitions. Entitlement, balance, and transfer mechanics are unified — so a payment right can move, be pledged, or be financed without reconstructing documentation.
In traditional finance, a call right needs notice, discretion, and enforcement. Here it is embedded in the asset itself: the holder exercises withdrawal, redemption, or collateral enforcement cryptographically. It does not replace the legal right — it operationalises it.
A conditional exchange settled by a smart contract that enforces simultaneous delivery: both legs settle or assets revert. The contract takes no economic ownership and exercises no discretion — it removes settlement-gap risk and the cost of bilateral structuring.
Lock a tokenised asset as collateral; the lender delivers the upfront payment. At maturity the outcome is rule-based — repay and the collateral releases, or it transfers to the lender. No discretionary enforcement, no intermediary holding economic control. Smaller-ticket repo becomes viable.
An asset with mobility can be sold. An asset with collateral mobility can be funded.
Utility is not merely transferability — it is the range of economically viable actions against an exposure: retain and earn carry, sell outright, repo for liquidity, or swap into a different risk position.
The thesis, run on live structures.
The report is not a whitepaper. Its claims were demonstrated through two exercises on real Australian credit structures — one modelled, one settled in central-bank money.
A live ABS, as a state machine.
The Wisr Freedom Trust 2025-1 — a ~A$249.5m Australian consumer-loan securitisation — modelled as deterministic state without altering its bankruptcy-remote legal perimeter. Loan state tracking, waterfall allocation, entitlement verification, and trigger enforcement, expressed as rule-bound transitions.
An ABS already functions as a distributed state machine — coordinated across servicers, banks, trustees, administrators, and calculation agents.
The greatest value sits at the foundational layer: tokenising the loan register and its payment state, fed on-chain via oracles into existing servicing systems.
The ABS becomes a template, not a single vehicle — its safety properties generalise across the lending market.
Settled in central-bank money. Executed by YieldFabric.
A collateralised-lending transaction executed entirely on-chain — investor funding, credit deployment, collateral binding, repayment, and redemption, each an atomic swap. Settlement used a wholesale CBDC, an ERC-20 token issued by the Reserve Bank of Australia on the Redbelly Network: the first legal tender issued by a central bank on a public network.
Why CBDC? A direct central-bank liability removes the intermediary exposure of commercial bank money — giving large non-bank institutions clarity of settlement-asset risk and finality.
The investor swaps 10,000 tokenised AUD for one Investment Token. The token cryptographically grants the right to withdraw from the Issuer Account at any time — no approval, no off-chain coordination.
The issuer swaps a Credit Facility Token for a Collateral Token. The credit line is established entirely through token-based permissions rather than legal mandates.
The collateral account deploys 5,000 tokenised AUD to the borrower via atomic swap, receiving a Loan Token (the repayment obligation) and the pledged digital collateral.
The investor unilaterally withdraws 5,000 tokenised AUD using the Investment Token — without issuer consent, and without disturbing the originated loan.
The borrower repays 5,000 tokenised AUD and reclaims the Loan Token and collateral. Liquidity returns to the issuer. The loan is extinguished.
The investor withdraws the remaining capital. The Issuer Account settles to zero — every obligation satisfied, no residual discretionary claim remaining.
A chain of risk you can trace.
In a YieldFabric repo swap, the lender receives a single stateful instrument — a composed contract bundling the pledged collateral (in escrow) and the right to the repurchase payment. Because that contingent right is itself a clearly-defined token, it can be re-pledged — and the original obligor stays the root anchor of credit risk the whole way down.
True collateral mobility — multiple funding layers, no physical re-transfer.
Transparent risk propagation — trace any layer back to the originating obligor.
Controlled encumbrance — what is locked and re-pledged is explicit.
Capital efficiency, without severing the linkage to the source of risk.
Confidential execution framework.
Institutional counterparties need confidentiality between each other and a single cryptographic source of truth. YieldFabric reconciles the two — balances and counterparties stay private, while correctness stays provable.
Programmable custody that behaves like a trustee or custodian account — but enforced by on-chain logic. Role separation keeps custody, control, and economic exposure with distinct parties; balances stay private; compliance is provable.
Delivery-versus-payment between two parties, settled in a single transaction — every leg executes or none does. Composed into bundles, these swaps settle multi-party structures atomically, preserving the separation of custody and control that structured finance requires.
Prove the rules are satisfied — sufficient balance, valid ownership, valid transition — without revealing balances, counterparties, or intent. Proof verification gatekeeps execution; authorised auditors get artefacts without full disclosure.
Orthodox by law. Certain by design.
Market efficiency emerges when data integrity and operational integrity reduce uncertainty, coordination cost, and evidentiary friction. Expressed as deterministic state — and settled in central-bank money — securitisation-grade protections (defined seniority, rule-bound allocation, limited recourse, collateral mobility) become economically viable at smaller scales.
Project Acacia was the proof. YieldFabric is the product.
The confidential vaults, atomic swaps, zero-knowledge proofs, programmable obligations, and repo-swap framework that ran the pilot are not a prototype — they are YieldFabric. NotCentralised productised the work so any operator can express deals as deterministic state, settle them atomically, and keep them confidential.
Concepts summarised from “Collateralised Lending Markets: A Tokenised Micro-Structure Approach” (Arturo Rodriguez, NotCentralised), prepared in connection with the Reserve Bank of Australia’s Project Acacia pilot. References to the Reserve Bank of Australia are descriptive; no endorsement is implied.