The emergence of cryptocurrency has changed the way capital is raised.
Access to capital
is the seed of innovation. Start-ups rely on funding to turn ideas into
products and platforms. The ICO has enabled talented managerial teams to
get the funds needed to launch the next big thing.
Cryptocurrency has changed the appreciation of capital, but this must be the beginning.
The financial
market is much bigger than just venture capital funding. In fact, the
largest part of the financial sector focuses on the debt market, which
involves borrowing and borrowing money. The debt market serves everyone
and every entity, from ordinary people to trillion-dollar companies like
Apple.
Blockchain can change the way the debt market functions.
Debt Market Decentralization
A new blockchain project, Vena Network ,
aims to decentralize the debt market, thereby implementing the benefits
of blockchain technology to the most prominent services in the
financial sector.
The key to success
behind ICOs is that they allow an increase in p2p capital. Instead of
the masses having to go through VC funds that take high fees, people can
invest without having to go through intermediaries. The Vena Network
intends to provide similar benefits in the debt market by removing the
need for intermediaries in the lending process.
Vena Network combines a number of roles to build protocols that can allow borrowing p2p.
To ensure
that P2P lending works, it is important that those who have an important
role in the network have a stake in the success of the platform. In
addition, the loan market is complex and everyday people cannot maintain
the constant analysis needed to maintain a successful debt
market. Thus, Vena Network uses its own form as evidence of delegated
ownership for those who intend to manage loans. This process is handled
by Vena Nodes.
Veins Nodes exist
as market makers. They not only manage loans, but also provide liquidity
in the network. They can even activate transactions, credit
evaluations, contract plug-ins, and more.
Veins Nodes are
verified participants who must provide evidence of knowledge. They must
be experienced with the debt market: having a valid legal understanding
and debt functions are basic requirements.
Need a jury
While the blockchain community believes that code is king, not everything can be handled by an algorithm.
Usually, the
Vena Network will ask those who want a loan to provide cryptocurrency
guarantees. In the event of a debt recipient failure, the lender will
receive collateral as compensation – the standard mechanism adopted from
the traditional debt market.
However, on rare
occasions, a case requires an assessment from a judge. The Network Veins
are responsible for this situation in an effort to make the
blockchain-powered debt market a possible proof of error.
To ensure cases
where a smart contract cannot handle a debt settlement scenario, the
Judge Vena herself will step in to resolve the dilemma. While debt
resolution judges currently have no incentive to make the right
decisions, Vena Networks will force them to make the right decisions
because judges will risk tokens and can lose them if they are proven to
make wrong decisions.
In short, Vena
Network introduces blockchain to the debt market and effectively offers
the means to decentralize this part of the debt market. This forces
decision makers to risk VENA tokens to participate, and this ensures the
DAO VENA can function without the centralized authority that imposes
orders.
Vena Network will be the benefit of decentralization (and blockchain) to the debt market.
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