Ripio Credit Network (RCN)
A global peer-to-peer credit network based on co-signed smart contracts.
Ripio Credit Network is a global credit network based on co-signed smart contracts and Block-chain technology that increases transparency and reliability in lending. Considered one of the most promising Bitcoin / Block-Chain start-up companies in Latin America, Ripio has more than 100,000 users in this region.
The RCN network aims to solve the problems of the traditional credit system by providing credit democratization in Latin America. Some of these issues are as follows.
Many people living in underdeveloped or developing countries have never had access to banks and loans or have limited access. In Latin America, this segment accounts for approximately 65% of the total population. High bureaucratic and operating costs are partially or fully reflected in the borrower. The peer-to-peer lending system offered as an alternative to the classical credit system is not without problems:
Credit risk is measured by the lender, not by the platform. The credit risk assessment process is asymmetric. In cases where peer-to-peer network access is interrupted, such as bankruptcy, the lender is then often faced with various problems. The Ripio Credit Network aims to solve these problems faced by traditional credit systems and peer-to-peer lending system.
Ripio aims to solve these problems with three main elements.
- Peer-to-peer network: establishes the link between borrowers and lenders, regardless of geographic boundaries, and performs them in much better conditions than traditional banking services.
- Smart contracts: Providing the creditor's credentials to the lender allows an unbiased risk assessment.
- Co-signature: The co-signer reduces the risk taken by the lender and improves the contract conditions in his favor within the framework of the local legal system to which the borrower is bound.
How it works:
Pedro, a student in Rio de Janeiro, wants to buy a car to go to the university where he is studying. Pedro asks to borrow 9,799 Brazilian Real ($ 2,779) from his Wallet Provider. The wallet provider then generates, fills, and signs a smart contract with the amount requested in RCN equivalent to 9,799 Brazil Real then transmits it to the network. The contract includes conditions such as interest rate and installment count. The smart contract is then completed with the data from the authenticator, the scorer tool, and the co-signer.
Wang, an airline company in Shanghai, has recently accumulated 20,000 Chinese Yuan ($2,996), which he is not planning to spend. He decides to invest in a p2p loan and orders it through the RCN where it includes agreements on the interest rate, maturity date and more. The smart contract is settled in RCN, however, the value is represented in USD in accordance with the data supplied by the Oracle. The equivalent of $0.85 in USD goes to the ID verifier, $1.10 in RCN goes to the scoring agent, $111.69 in RCN goes to the cosigner, and $2978 in RCN is transferred to Pedro’s wallet provider. Then, the wallet provider trades those RCN for the amount of Brazil Real requested by Pedro as a loan to buy his car.
Pedro has now committed to paying a 24-month debt of $ 136.14 a month and a total of $ 2,979,95. Pedro agrees to return an amount that includes the commissions for the ID verifier and the score provider, and Wang pays the cost of the cosigner. Wang's internal earnings rate is slightly lower than 9%, while Pedro's interest rate is slightly over 9%.
- Have a detailed white bulletin with realistic goals.
- 65% of people living in Latin America do not have access to borrowing services, showing that Ripio is trying to find a solution to an existing problem.
- Easier for platform users to use local currencies rather than RCN when processing
- Increases the likelihood of this project being accepted in the mainstream
- Very experienced team
- Eight strategic partners and supported by various investors such as Pantera Capital, Boost VC
- Need for many parties such as co-signatory and wallet provider for the beginning of the project may be problematic in terms of scaling and adequate acceptance of the project in the early stages
- Needs banks due to local money use. (The banking industry, which usually has a negative attitude towards the crypto-money market, puts stones on Ripio's path.)
RCN as of now is available in Bittrex, Binance, EtherDelta, Gate.io, OKEx, and UpBit stock exchanges. Among these, Binance and Bittrex are more widely used.
Ripio shows a lot of promise and has a significant amount of users reaching to more than 100,000. While this may be an amazing feat, it should also be noted that the platform has no roadmap on their website, thus making it unknown to users how well they are performing. Nevertheless, there are many who believe that this will be a successful project as there is an excellent team behind it.