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“(Cryptocurrency) lacks a lot of features. But it has this one feature that never existed before, and that’s trust. You don’t have to trust the government or Twitter and Facebook, or the other people even on the network. You just have to trust math.” – Ben Horowitz, co-founder of Andressen Horowitz investment fund.
Finance is the one field where the use of blockchain seems more than just interesting and reasonable, but crucial. One may find it strange that a field so tightly connected to hard maths, is in fact, one of the most vulnerable to the human element. Bureaucratic mechanisms, obscene fees from intermediaries, obstacles on a state level. The greed of existing power structures and the wasteful nature of interactions between transacting parties have spawned the urgent need for drastic changes.
One of the leaders in the fintech field is the P2P loan market, rated $64 billion in 2015. According to Morgan Stanley projection, its market cap may reach $290 billion by 2020.
In the traditional fintech sector loan interest is set 2-3 times higher than deposit interest rates. In essence, both borrowers and lenders lose considerable resources to third parties that can be done without. Besides loans through banks and other traditional intermediaries require papers, validation, and guarantees. This leads to considerable additional time expenditure that grows in direct ratio to the size of the loan which often becomes unsustainable. The validation process and other requirements, as well as interest rates, are all governed by intermediaries, not the transacting parties. It is the ability to get rid of the third party that makes P2P loans attractive to the transacting parties.
The Crypt-ON platform offers a comprehensive solution for secure and convenient P2P lending. All transactions on the platform are secure thanks to multiple types of smart contracts. An additional security measure is the independent arbitrage system that will become more decentralized as the community develops: first judges will be system administrators, later, as the platform grows and forms a fully-fledged DAO community where DAO delegates will step up as judges.
The key element in the platform will be the trust token displayed as a rating. It will contain all the information about the user: actions, deals summary, user reviews. The higher the rating the more beneficial conditions for a loan will be available to the user. Besides, the Crypt-ON trust token can be used in other services.
The volatility issue and contingency fund
Loans can be taken out in a number of traditional cryptocurrencies as well as stable coins. Market rate of stable coins is kept at a certain level that will help alleviate the main issue of loans in cryptocurrency that is high volatility of most digital assets.
If the Hard Cap is reached, a contingency fund will be put in place containing 20 million I-Point tokens. The fund will be used for delinquent loan settlements. In the future, it will be replenished from commissions on transactions within the platform.
P2P loans are only one of four key business categories that will be present on the Crypt-ON platform. The platform will feature secure deals, geotargeting-assisted exchange, and a crypto employment office.
This is how the trust token will become the most important asset that will instantly provide real information about a user. The tool that traditional financial institutions never had, will allow eliminating intermediaries along with unjust limitations and absurd fees. In time, the token backed by trust will become one of the fundamental elements in forming a DAO community that will create fair and impactful opportunities for interacting within the Crypt-ON financial ecosystem.
The DAO concept used in implementing the project will serve as a springboard for advancing the P2P lending sector, secure deals and exchange of cryptocurrency with a new model for market participants to use that is transparent, balanced, secure and independent from intermediaries.
Paul Andreev, Crypt-ON CEO.
You can learn more about other Crypt-ON services and TGE terms and conditions on the website at https://crypt-on.io/