- defi
- Agriculture & DeFi
Bru Finance: tokenised warehouse receipts as DeFi collateral
A Polygon protocol that mints warehouse receipts as commodity tokens, so a physical asset sitting in storage can be borrowed against in stablecoins.
- Blockchain Engineering
- Smart Contracts
- DeFi Protocols
At a glance
- Sector
- Agriculture & DeFi
- Type
- defi
- Services
- Blockchain Engineering · Smart Contracts · DeFi Protocols
The problem
What it had to solve
Smallholder producers in emerging markets borrow expensively, or not at all, because they have no formal credit history for a lender to price against. The value they do hold is physical — grain, spices, stored crops — and it is effectively frozen: usable as collateral in principle, but not without paperwork and waiting time that outlast the harvest cycle it was meant to fund.
Moving real-world assets on-chain is only useful if the rails underneath are cheap enough for small balances. Bru Finance needed infrastructure that could carry a high volume of low-value transactions, and a way of representing goods sitting in a warehouse that a lender on the other side of the world would be willing to lend against.
What we built
How it works
We built a DeFi protocol on Polygon that mints tokenised representations of warehouse receipts. A commodity deposited into a partner warehouse produces a commodity token, and that token is what a borrower posts as collateral against stablecoins drawn from decentralised liquidity pools.
Two things had to hold for the collateral to be worth anything to a lender: a price, and control of the contracts holding it. Chainlink oracles supply commodity price feeds so collateral health is calculated against market data rather than a self-reported value, and Gnosis Safe multi-sig governs the protocol's treasury and administrative functions. Polygon was the network choice because gas has to be small next to the loan — on a fixed-fee chain, a small balance pays a disproportionate share of its principal just to move.
Calls we would still defend
Dynamic LTV ratios — contract logic sets the loan-to-value ratio per commodity, against its shelf life and how volatile its market price is, so a perishable crop is not lent against on the same terms as a stored grain.
Gnosis Safe multi-sig — treasury and collateral-management functions require a threshold of authorised signatures rather than a single key, so no one signer can move protocol funds alone.
On-chain provenance — each commodity token carries metadata for the origin, quality grade and storage duration of the physical asset it represents, written at the point the warehouse issues the receipt.
Built with
Polygon (PoS)
Throughput and low gas, which is what makes a small loan viable — the fee to interact with the chain has to stay small relative to the amount being borrowed.
Chainlink
Commodity prices aggregated from multiple sources, so collateral health is calculated against a feed rather than a single reported number.
Solidity
The language the lending and borrowing contracts are written in, and the one with the deepest tooling for reviewing them before deployment.
Gnosis Safe
Threshold signing for the protocol's treasury and admin functions, so control is distributed across signers instead of held in one key.
Where it landed
What the build changed
Tokenised
Collateral
warehouse receipts minted as commodity tokens on Polygon
Chainlink
Price feeds
lending logic reads the oracle value, not a submitted figure
Multi-sig
Treasury control
Gnosis Safe threshold signatures on treasury and collateral functions
FAQ
The questions this build raises
What was actually built, the constraints it had to meet, and how it holds up in use.
They stay in the partner warehouse that issued the receipt. The protocol is built so the release of goods runs through on-chain settlement: the receipt token is what the loan is secured against, and clearing the debt is what unlocks it. The warehouse relationship is where the physical side of that is enforced, which is why the partner requirements matter as much as the contract logic.
Because the fee has to be small next to the loan. Agricultural lending is a high volume of small balances, and on a chain with higher gas the cost of interacting with the protocol takes a meaningful share of what a borrower is trying to raise. Polygon keeps that cost low enough that small loans stay worth making.
Chainlink price feeds, aggregating data from multiple commodity sources, rather than a price submitted by either side of the loan. That is what lets the contract calculate collateral health on its own and adjust the loan-to-value ratio as a market moves.