pRipio Credit Networknbsp;a global credit network based on cosigned smart contractsnbsp;by Ripio International Limitednbsp;Abstractnbsp;RipioCredit Network“RCN”isaprotocolbasedonsmartcontractsandblockchainnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;technology,whichbringsenhancedtransparencyandreliabilityincreditandlending.nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;Theprotocolenablesconnectionsbetweenlendersandborrowerslocatedanywhereinnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;theworld,regardlessofcurrency.Byreducingthetraditionalbankingbrokeragecostsnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;andmanagementfees,RCNaimstoallowbetterconditionsforbothsides,creatinganbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;bettercredit alternativethananythingavailabletoday.Byincludinganintermediarynbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;agentthe“Cosigner”,theRCNseekstoneutralizethelender’screditriskand,incasenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;ofadefault,provideanalternativemechanismanagingthedebtcollectioninthenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;borrower’s country of residence.nbsp;Ripio International Limitednbsp;https//worknbsp;Page 1 nbsp;1. Contextnbsp;1.a. The traditional banking systemnbsp;The financial systemhas beenone of the mainactors of the global economy fornbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;hundreds of years. Credit, one of its essential functions, consists of managing thenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;savingsof apopulationbychannelingthesesavingsfromagentswithsurplusfundsnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;lenders to others with insufficient funds borrowers. [See Figure 1.]nbsp;Inahypothetical scenarioinwhichnobankexistedasanintermediaryagent,foranbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;credittransactiontotakeplacebothborrowersandlenderswouldneedto1becomenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;awareofeachother’sexistence,2agreeonhowtovaluetheriskinvolvedinthecreditnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;transaction,3agreeontime-limits,amounts,andrelatedterms,andfinally,4managenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;the logistics necessary to actually transfer the money during the lifetime of the loan.nbsp;Today,bankintermediationreducesthesetransactionandinationcosts,butwithnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;certainlimitations. Generally,banksfocustheiroperationsindeterminedgeographicnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;locations,whichmakesitdifficultforpeopleindifferentareastoconnectforpurposesnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;of credit transactions. Additionally, a large amount of the world’s population isnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;unbankedorunderbanked,andtherestareplainlyexcludedfromthefinancialsystem.nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;[SeeFigure2.]Banksgiveloansandcreditaccordingtotheirriskcapacities,andasanbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;result, somecredit projectsaretooexpensivetoundertakerelativetothewould-benbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;borrower’screditworthiness,andsomearesimplyun-creditableunderlocalbanks’risknbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;capacities. As a further limitation to bank intermediation of credit, the standardnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;credit-grantingprocessinvolvesinherentbureaucracyinthecollectionanddispersionnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;ofination,whichaddscostsandultimatelyexcludesevenlargersegmentsofthenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;population. [See Figure 3.]nbsp;[Figure 1 al saving around the world]nbsp;Ripio International Limitednbsp;https//worknbsp;Page 2 nbsp;[Figure 2 bank account penetration around the world]nbsp;[Figure 3 nbsp;origination of new al loans around the world]nbsp;* figure 1, figure 2, figure 3 nbsp;[1]nbsp;Ripio International Limitednbsp;https//worknbsp;Page 3 nbsp;1.b. Internet and the Rise of P2P Loansnbsp;During the last 15 years, the Internet has produced a radical shift in terms ofnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;inationandcommunication,settingoffanaccelerateddemocratizationprocessonnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;both for the people who have access to it.nbsp;ThenewsocialtechnologiesoftheInternethavealsohelpedtoexpandtheboundariesnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;of the traditional banking system by offering novel credit alternatives, such asnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;peer-to-peer “P2P” loans. These technologies helped the credit systemto movenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;forwardonsome key points 1 interest inmodernizing the whole credit-grantingnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;processrevvedup; 2 thesegment of thepopulationcoveredbytheinternet-basednbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;creditsystemincreased;3thelocalizationissuewasmitigated,tosomeextent;4thenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;intermediationcostswerereduced,andthustheP2Pinterestrateswerelessthanmostnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;traditional bank lending rates; and5 the shift brought better conditions for bothnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;lenders and borrowers in terms of uating a project’s creditworthiness.nbsp;TheInternet-drivenshiftwassignificant,buttherearesomestructuralproblemsstilltonbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;solve.First,thecreditriskisgenerallystillassumedbythelender,andnotbytheP2Pnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;plat. Second, the credit risk uation process, though improved, remainsnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;asymmetric.Third,thelenderhasonlyafewmanagementtoolstomanagetheirassets.nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;Finally,ifthecompanybehindtheP2Pplatdefaultsordeclaresbankruptcy,thenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;lender has limited recourse with respect to the borrower.[2]nbsp;nbsp;Inthiscontext, thelenderisconfrontedwithabinaryscenario itscounterpart thenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;borrowereithermeetsitsobligationsordoesnot.Inotherwords,theriskmaybetoonbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;bigandnot diversifiableenoughforagivenlendertoparticipateintheP2Plendingnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;plat.nbsp;nbsp;Ripio International Limitednbsp;https//worknbsp;Page 4 nbsp;2. Ripionbsp;Ripio erly BitPagos has been described as one of the most promisingnbsp;Bitcoin-Blockchain startups in Latin America.nbsp;Ripio means “gravel” in Spanish. Just like gravel serves as a foundation for newnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;roadways,Ripioaimstobuildnewroadsthroughoutthedigitaleconomy.Newroadsnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;create newpossibilities, andthey are the key towideningaccesstowards financialnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;inclusion for everyone.nbsp;Ripio’s main objective is to democratize the digital economy in Latin America,nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;offering digital payment alternativeswithineveryone39;sreachinaregionwhere65nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;remain unbanked.[3]nbsp;Duetoitseffortstowardthedemocratizationoffinance,Ripiowasrecentlyselectedasnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;oneof2017breakthroughbrandsbyInterbrand.[4] Here’swhattheglobalconsultancynbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;stated on their annual reportnbsp;Harnessingbreakthroughblockchaintechnology,Ripioisbringingfinancialnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;freedomtoregionsofLatinAmericanthatlackbanking.Itsellsbitcoinsinnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;local currencies to facilitate online transactions and easy peer-to-peernbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;payments, and evenextends creditnocards, accounts, or fees involved.nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;Ripiowhichmeans“gravel”inSpanishispavingtheroadtofullfinancialnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;inclusion in a growing digital economy.nbsp;nbsp;2.a. The Road of Ripionbsp;In2013, BitPagos startedasLatinAmerica’sfirstBitcoinpaymentplat,offeringnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;bitcoin-basedfinancial services for merchants. Ayear later, thecompanylaunchednbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;Ripio, adigital wallet that enablesconsumerstosend,receive,store,andbuyorsellnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;Bitcoininlocal currencyandtomakeonlinepaymentsonthousandsofwebsites.Innbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;January 2017, BitPagos rebranded as Ripio.nbsp;Ripio has over 100k users in Latin America.nbsp;2.b. Ripio Creditnbsp;In2016,RipiolaunchedagroundbreakingcreditservicecalledRipioCredit,reachingnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;the finals at TechCrunch Disrupt,[5] and revealing the innovative service to the world.nbsp;Ripio Credit currentlyextendscredit toRipiousers, allowingthemtofinancetheirnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;online payments in installments, using bitcoin as the transaction vehicle. Thisnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;alternative credit facility is available to individuals without acredit cardorabanknbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;account,anditrepresentsaservicethatnootherBitcoinwalletcompanyhadofferednbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;before.nbsp;Out of an Argentina-based entity, the company loans its own funds to borrowers innbsp;Argentina in order to provide the Ripio Credit service. The company works with localnbsp;Ripio International Limitednbsp;https//worknbsp;Page 5 nbsp;counsel to ensure compliance with all appropriate lending, data privacy, and financialnbsp;services laws, and the company currently provides Ripio Credit services only tonbsp;borrowers in Argentina.nbsp;nbsp;2.c. Milestonesnbsp;Ripio International Limitednbsp;https//worknbsp;Page 6 nbsp;3. Ripio Credit Networknbsp;A P2P credit network based on cosigned smart contractsnbsp;3.a. The P2P Networknbsp;Leveraging the existing Ripio Credit application, theRipioCredit Network“RCN”nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;leadstheroadtowardscreditdemocratization,offeringasolutiontotraditionalbankingnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;system alternatives to credit access.nbsp;RCNisaprotocol basedonsmartcontractsthatstandardizescreditlendingthroughnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;blockchaintechnology.Theprotocolfacilitatesconnectionsamongseveralagents,eachnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;of whomplayaroletoultimatelyofferthelenderbettertoolstomanageitscapital,nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;reduce the intermediationcosts betweena lender andborrower, provideincreasednbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;credit access to borrowers, and, as a result, make more projects viable.nbsp;TheRipioCreditNetworkcanconnectborrowers,lenders,andothernetworkagentsallnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;overtheworld,allowingeachoneofthemtomanagethecreditintheirlocalcurrencies,nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;aslongastheyhaveInternetaccess.First,theRCNconnectsanagentwithinationnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;on the borrower’s identity to an agent who analyzes the borrower’s credit risknbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;impartially.Next,theRCNenablesthesharingofthisinationwithacosigner,whonbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;isanagentthatprovidesaguaranteeontheloan;thecosignernotonlyreducesdefaultnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;risk for the lender, but it couldalsodiversifyitsowncredit riskbyguaranteeinganbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;number of loans – hence reducing and in some cases neutralizing that risk. Innbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;addition, inthe case of a default, the cosigner may managetheunpaiddebtsinanbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;traditional way e.g., through a debt collection process.nbsp;[Diagram the Ripio Credit Network]nbsp;At the time of the network launch, RCN will consist of the following agentsnbsp;- The Borrower who makes a credit request from its wallet provider.nbsp;- The Lender who invests by lending funds via a Credit Exchange.nbsp;Ripio International Limitednbsp;https//worknbsp;Page 7 nbsp;- TheWalletProviderwhogeneratesasmartcontracttoispecifythetermsofnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;the loan, ii receive funds fromthe Lenders via Credit Exchanges, andiiinbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;distribute these funds to Borrowers and other agents, as applicable andasnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;specified by the terms of the smart contract.nbsp;- The Scoring Agent provides a credit score for each Borrower.nbsp;- The Oracle sets the price feedof the RCNTokenaccording to the Walletnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;Provider’slocalcurrency,whichisusedtodeterminetheexchangeratebetweennbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;local currency andRCNTokens at the time the loaniscutedandwhennbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;subsequent repayments are made.nbsp;- The ID Verifier verifies the Borrower39;s identity.nbsp;- The CosignerwhoactsasaguarantorforBorrowers,andwhomayactasannbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;intermediaryagentbetweentheBorrowerandthelocallegalsystemintheeventnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;a Borrower defaults.nbsp;- TheCreditExchangeallowstheLender’soffertoextendcredittomatchwithanbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;Borrower’s request for credit via a smart contract generatedby the Walletnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;Provider.nbsp;3.b. RCN Tokensnbsp;AlthoughBorrowersandLenderswilllikelyprefertodenominatecredittransactionsinnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;alocalcurrency,RCNTokenswillberequiredtofacilitatetransactionsamongtheothernbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;agentsintheRCN,asfurtherdescribedbelow.RCNTokenswillberequiredtoaccessnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;the RCNnetwork giventhat agents39; fees andobligations –plusthecorrespondingnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;distributionexpenseswithinthenetwork–aredrivenbytheuseofthesetokens.RCNnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;Tokens also act asanincentivetoeachoneof itsparticipant agentstocontinuetonbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;participate in the network.nbsp;nbsp;3.c. The Smart Contractnbsp;The“smartcontract,”generatedbytheWalletProviderandcutedwhenmatchedbynbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;theCreditExchange,containstherelevantcreditterms,Borrowerobligations,eventsofnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;default,andsignaturesorverificationsfromeachoftheotheragents,asapplicable.RCNnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;TokenswillfacilitateinteractionwiththesmartcontractamongagentswithintheRCN.nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;EachcreditflowstartswiththeBorrowerwhomakesacreditrequest.TheBorrowernbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;perstherequestfromitsWalletProvider,whichhasalreadyintegratedtotheRCNnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;protocol, and then the Borrower waits for an approval.nbsp;nbsp;TheWalletProvideri.e.,anyentitythatwantstooffercreditservicestoitsusersviathenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;RCN addsinationabout theBorroweranditscreditrequest,generatesasmartnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;contract,andthenbroadcastsittothenetwork.Borrowerswillonlyconnectwiththenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;RCNthrough a Wallet Provider. As a conditionto using any software or servicesnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;providedbyRipiototheRCN,eachWalletProvidermustwarrantitscompliancewithnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;allapplicableregulatoryframeworksforthejurisdictionsinwhichtheWalletProvidernbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;offers its services, including any applicable lending laws.nbsp;nbsp;The Oracle providestheserviceof iningtheexchangeratebetweenanygivennbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;currencyusedbyaWalletProvider,CreditExchange,Borrower,orLender,andRCNnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;Tokens,atanytimeitisconsulted.TheOraclewillmostfrequentlybeconsultedatthenbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;time a loanis originated, andduring thecredit lifetimeinordertodetermineitsnbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;inst/p