Depository Network: A Crypto Asset Collateral System

Depository Network: A Crypto Asset Collateral System

 Digital currencies have been gaining momentum as secure ways to manage and move fiscal assets. Blockchain is emerging as a key solution in the lending and risk management space. Blockchain, which is central to bitcoin and similar currencies, gives organizations an opportunity to track and document how money moves in more intuitive ways than they have been able to in the past. This in turn simplifies regulatory and risk management processes, turning the traditional lending ecosystem on its head. Financial services firms that get ahead of this trend have an opportunity to use blockchain alongside other emerging technologies to implement alternative lending strategies into operations.
To understand the potential impact of blockchain, look no further than emerging startups that are already disrupting alternative lending. Blockchain is allowing organizations to break up digital loans into more pieces, with components owned by more varied investors, creating a highly liquid asset without adding to risk.

The current challenges in the sub-sector

  • Digital assets are lacking when it comes to liquidity and yet the people that hold them must sell them in order to get any value and yet selling is difficult because of the taxes involved which cancels whatever profit that may be made.
  • It is expensive and takes a lot of time taking away any possibility for private companies to build their own digital asset storage.
  • The traditional institutions are able to make use of depository services for actual collateral but no such arrangement exist when it comes to digital assets.
  •  It is true that digital assets are accepted within the blockchain world, they are not known in the traditional financial world.

The solution

Depository Network is a platform that makes possible for lenders to accept blockchain assets as collateral. The idea behind this system is for lenders to recognize digital assets as collateral for loans. This will revolutionize the sub- sector in that it will unleash completely the financial potentials of the sub sector which is worth billions of US Dollars.
Statistics available points to the fact that there are above 30000 lenders and 17500 banks all over the globe, who use depository services for real assets collateral, but when it comes to digital assets no such exists.
The enterprise intends to be the world’s first decentralized multi-platform collateral infrastructure. This is captured in its blueprint which is to create a secure collateral system for digital assets that can reach the point of mass adoption and enable the customers to trade using a whole new level of quality, safety and speed.
It aims to protect the borrower and the lender and reduce drastically incidences of fraud.

How it functions

The ecosystem will be an avenue for lenders to build custom depository platform by using its tokens. This will give them a number of options as to the digital assets to use as collateral. The holders will hold back real ownership of these assets through smart contracts within the time framework of the loan.
Also included as a unique feature is that a lender will be allowed to spell out the terms for their contracts, which will be enforceable individually and automatically.

Useful Links:          Website | Whitepaper | ANN Thread

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ETH Address:  0x1461C3727dC461EfF7B32751dFf56c51c2218d5E

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