Critical Money

Critical Money: Unlocking Liquidity for Critical Minerals and Rare Earths

🔗 URLs / Links

• Github: https://github.com/raspcwalter/CriticalMoney 
• Slides (pitch deck): https://tinyurl.com/CriticalMoneyPitchDeckFinal 
• dApp: https://criticalmoney.vercel.app/

📝 Main Smart Contracts

• LendingPool
• PledgePlatform

🗨️ Description 

TL;DR

Critical Money is the tokenization of critical minerals and rare earths, allowing the resulting digital assets to be used as collateral on a decentralized P2P lending platform.

🔎See the Appendix for more on Critical Minerals and Rare Earths

📓 Executive Summary

Critical Money addresses the liquidity challenge faced by the global market for Critical Minerals and Rare Earths (see below), a sector valued at over $336 billion USD per year (as of 2024). Despite the strategic and intrinsic value of these assets, mining companies often face the challenge of having significant capital tied up in commodities that have long sales and negotiation cycles, limiting their working capital and expansion investment capacity.

The Solution Mechanism: RWA + P2P Lending

Our solution is a robust and transparent bridge between the physical world of commodities and the decentralized finance (DeFi) ecosystem, using Real-World Assets (RWA).

RWA Tokenization

Critical minerals (such as lithium, cobalt) rare earths undergo secure auditing and kept at safe custody are tokenized. Each digital token is issued on the blockchain, representing the ownership and value of the audited physical batch, 1 (troy) ounce is 1 token.

Decentralized Over Collateralization

The RWA tokens, which are directly backed by the physical asset and are continuously re-evaluated via market oracles, are used as high-quality collateral on a P2P Lending (Peer-to-Peer) platform. Critical Money is the Aave for critical minerals and rare earths.

Smart Contract Loans

Borrowers (the mining companies) request a loan in stablecoins and lock their RWA tokens as collateral in an auditable Smart Contract. Lenders (the investors) provide the liquidity in exchange for a return on capital (up to 12% APY).

Value Proposition and Impact

Critical Money generates value on two fronts:

1. For Borrowers (Miners and Producers)

• Immediate Liquidity: Allows companies to transform illiquid assets (inventory) into working capital within minutes, without the need to sell the physical product.
• Capital Efficiency: Access to potentially more competitive interest rates and faster processes than traditional bank financing.
• Transparency: Tokenization ensures the immutability of the custody record and a transparent, auditable collateral valuation.

2. For Lenders (Investors and Funds)

• Exposure to RWA: Offers a new asset class backed by strategic, high-demand global commodities, diversifying portfolios beyond purely digital assets.
• Competitive Return: Lenders receive interest and participate in a market with high growth potential.
• Security: The investment is protected by the physical collateral, with liquidation rules (collateral execution) programmed directly into the Smart Contract in case of default.
• The Critical Money project not only solves the market pain point for mining companies but also establishes a new standard for the liquidity and trading of strategic commodities in the 21st century.

🤝 Sponsors

We deployed all the contracts using Arbitrum Sepolia. 

Deployed contracts addresses:

• ATC (USD faucet): 0x906e8e6FB02DC4F507227Fb8c75cA1B0e9D10e23 
• Silver (tokenized metal): 0x490B18a43c0797c0543a3Cd94E211657C779d06C
• XAGPrice (oracle): 0x17c8F627D5BF60588e1C02c84c783678f4EC8059
• LendingPool (borrow/lend): 0xFF0E997dA92B179349dA072f5b122977B848D44E
• PledgePlatform (tokenization): 0x6BF6CfB0779cEf6b40ff88bB19060Ee8c84c8ADD

We used functions to read metal prices using an available Chainlink API. 

• Subscription: 541
• API: https://metalpriceapi.com/ 

XAGPrice (XAGPrice.sol) is the contract that uses the oracle to get daily price for silver:

import { FunctionsClient } from "@chainlink/src/v0.8/functions/v1_0_0/FunctionsClient.sol";
import { FunctionsRequest } from "@chainlink/src/v0.8/functions/v1_0_0/libraries/FunctionsRequest.sol";
import {Strings} from "@openzeppelin/contracts/utils/Strings.sol";

contract XAGPrice is FunctionsClient {    
using FunctionsRequest for FunctionsRequest.Request;

// Arbitrum Sepolia    
bytes32 public constant donId = 0x66756e2d617262697472756d2d7365706f6c69612d3100000000000000000000;    
address public constant router = 0x234a5fb5Bd614a7AA2FfAB244D603abFA0Ac5C5C;
uint32 gasLimit = 300000;

constructor() FunctionsClient(router) { admin = msg.sender; }

function sendRequestUSDXAG(uint64 subscriptionId, uint256 timestampStart, string memory apiKey) external returns (bytes32 requestId) {        
require(msg.sender == admin, "You're not the admin");        
string[] memory args = new string[](2);        
args[0] = Strings.toString(timestampStart);        
args[1] = apiKey;        
FunctionsRequest.Request memory req;      
req.initializeRequestForInlineJavaScript(sourcePrice);        
req.setArgs(args);        
s_lastRequestId = _sendRequest(req.encodeCBOR(), subscriptionId, gasLimit, donId);        
return s_lastRequestId; }

Appendix

Critical Minerals and Rare Earths are foundational components of modern strategic technologies, including electric vehicle batteries (Lithium, Cobalt), high-efficiency turbines (Rare Earth magnets), advanced defense systems, and semiconductor chips (Silicon, Niobium). Their importance stems from their essential, often non-substitutable role in the energy transition and global security. The high risk of supply concentration—frequently stemming from geopolitical volatility—coupled with constantly rising global demand, assigns a premium strategic and financial value to these resources. This intrinsic value, however, is often trapped in illiquid physical inventory, making the tokenization of these Real-World Assets a massive opportunity to unlock capital and bridge the gap between physical wealth and decentralized finance (DeFi).

Below is the list of these minerals:

💎 Critical Minerals

Essential mineral resources for strategic technologies, with a high risk of supply and difficult substitution.

• Aluminum – Base for light alloys used in transport and construction.

• Cobalt – Essential for lithium-ion batteries and resistant alloys.

• Copper – Fundamental for electrical conduction and energy infrastructure.

• Graphite – Key material for anodes in batteries and lubricants.

• Lithium – Central element in rechargeable batteries for electric vehicles.

• Manganese – Used in steel alloys and batteries.

• Nickel – Important for batteries and high-strength alloys.

• Niobium – Ensures strength and lightness in alloys for the aerospace industry.

• Potassium – Essential nutrient for agricultural fertilizers.

• Silver – High conductivity for electronics and industrial applications.

• Silicon – Base for semiconductors and solar panels.

• Zinc – Corrosion protection and metal alloys.

• Rare Earths – Indispensable for magnets, turbines, and advanced electronics.

⚡ Rare Earths

A group of 17 chemical elements used in advanced technologies, with concentrated production and high strategic value.

• Cerium (Ce) – Automotive catalysts

• Dysprosium (Dy) – Heat-resistant magnets

• Erbium (Er) – Medical lasers

• Gadolinium (Gd) – Contrast agent in MRI

• Holmium (Ho) – Lasers

• Lanthanum (La) – Rechargeable batteries

• Lutetium (Lu) – PET scans

• Neodymium (Nd) – Powerful magnets

• Praseodymium (Pr) – Colored glasses

• Promethium (Pm) – Nuclear batteries

• Samarium (Sm) – Permanent magnets

• Scandium (Sc) – Lightweight alloys

• Terbium (Tb) – Fluorescent screens

• Thulium (Tm) – Portable lasers

• Yttrium (Y) – Superconductors

• Europium (Eu) – LED screens

• Actinium (Ac) – Nuclear medicine

e-mail us at [email protected]