RCN (Ripio)白皮书.pdf
Ripio Credit Networka global credit network based on cosigned smart contractsby Ripio International LimitedAbstractRipioCredit Network“RCN”isaprotocolbasedonsmartcontractsandblockchain technology,whichbringsenhancedtransparencyandreliabilityincreditandlending. Theprotocolenablesconnectionsbetweenlendersandborrowerslocatedanywherein theworld,regardlessofcurrency.Byreducingthetraditionalbankingbrokeragecosts andmanagementfees,RCNaimstoallowbetterconditionsforbothsides,creatinga bettercredit alternativethananythingavailabletoday.Byincludinganintermediary agentthe“Cosigner”,theRCNseekstoneutralizethelender’screditriskand,incase ofadefault,provideanalternativemechanismanagingthedebtcollectioninthe borrower’s country of residence.Ripio International Limitedhttps//workPage 1 1. Context1.a. The traditional banking systemThe financial systemhas beenone of the mainactors of the global economy for hundreds of years. Credit, one of its essential functions, consists of managing the savingsof apopulationbychannelingthesesavingsfromagentswithsurplusfunds lenders to others with insufficient funds borrowers. [See Figure 1.]Inahypothetical scenarioinwhichnobankexistedasanintermediaryagent,fora credittransactiontotakeplacebothborrowersandlenderswouldneedto1become awareofeachother’sexistence,2agreeonhowtovaluetheriskinvolvedinthecredit transaction,3agreeontime-limits,amounts,andrelatedterms,andfinally,4manage the logistics necessary to actually transfer the money during the lifetime of the loan.Today,bankintermediationreducesthesetransactionandinationcosts,butwith certainlimitations. Generally,banksfocustheiroperationsindeterminedgeographic locations,whichmakesitdifficultforpeopleindifferentareastoconnectforpurposes of credit transactions. Additionally, a large amount of the world’s population is unbankedorunderbanked,andtherestareplainlyexcludedfromthefinancialsystem. [SeeFigure2.]Banksgiveloansandcreditaccordingtotheirriskcapacities,andasa result, somecredit projectsaretooexpensivetoundertakerelativetothewould-be borrower’screditworthiness,andsomearesimplyun-creditableunderlocalbanks’risk capacities. As a further limitation to bank intermediation of credit, the standard credit-grantingprocessinvolvesinherentbureaucracyinthecollectionanddispersion ofination,whichaddscostsandultimatelyexcludesevenlargersegmentsofthe population. [See Figure 3.][Figure 1 al saving around the world]Ripio International Limitedhttps//workPage 2 [Figure 2 bank account penetration around the world][Figure 3 origination of new al loans around the world]* figure 1, figure 2, figure 3 [1]Ripio International Limitedhttps//workPage 3 1.b. Internet and the Rise of P2P LoansDuring the last 15 years, the Internet has produced a radical shift in terms of inationandcommunication,settingoffanaccelerateddemocratizationprocesson both for the people who have access to it.ThenewsocialtechnologiesoftheInternethavealsohelpedtoexpandtheboundaries of the traditional banking system by offering novel credit alternatives, such as peer-to-peer “P2P” loans. These technologies helped the credit systemto move forwardonsome key points 1 interest inmodernizing the whole credit-granting processrevvedup; 2 thesegment of thepopulationcoveredbytheinternet-based creditsystemincreased;3thelocalizationissuewasmitigated,tosomeextent;4the intermediationcostswerereduced,andthustheP2Pinterestrateswerelessthanmost traditional bank lending rates; and5 the shift brought better conditions for both lenders and borrowers in terms of uating a project’s creditworthiness.TheInternet-drivenshiftwassignificant,buttherearesomestructuralproblemsstillto solve.First,thecreditriskisgenerallystillassumedbythelender,andnotbytheP2P plat. Second, the credit risk uation process, though improved, remains asymmetric.Third,thelenderhasonlyafewmanagementtoolstomanagetheirassets. Finally,ifthecompanybehindtheP2Pplatdefaultsordeclaresbankruptcy,the lender has limited recourse with respect to the borrower.[2]Inthiscontext, thelenderisconfrontedwithabinaryscenario itscounterpart the borrowereithermeetsitsobligationsordoesnot.Inotherwords,theriskmaybetoo bigandnot diversifiableenoughforagivenlendertoparticipateintheP2Plending plat.Ripio International Limitedhttps//workPage 4 2. RipioRipio erly BitPagos has been described as one of the most promisingBitcoin-Blockchain startups in Latin America.Ripio means “gravel” in Spanish. Just like gravel serves as a foundation for new roadways,Ripioaimstobuildnewroadsthroughoutthedigitaleconomy.Newroads create newpossibilities, andthey are the key towideningaccesstowards financial inclusion for everyone.Ripio’s main objective is to democratize the digital economy in Latin America, offering digital payment alternativeswithineveryonesreachinaregionwhere65 remain unbanked.[3]Duetoitseffortstowardthedemocratizationoffinance,Ripiowasrecentlyselectedas oneof2017breakthroughbrandsbyInterbrand.[4] Here’swhattheglobalconsultancy stated on their annual reportHarnessingbreakthroughblockchaintechnology,Ripioisbringingfinancial freedomtoregionsofLatinAmericanthatlackbanking.Itsellsbitcoinsin local currencies to facilitate online transactions and easy peer-to-peer payments, and evenextends creditnocards, accounts, or fees involved. Ripiowhichmeans“gravel”inSpanishispavingtheroadtofullfinancial inclusion in a growing digital economy.2.a. The Road of RipioIn2013, BitPagos startedasLatinAmerica’sfirstBitcoinpaymentplat,offering bitcoin-basedfinancial services for merchants. Ayear later, thecompanylaunched Ripio, adigital wallet that enablesconsumerstosend,receive,store,andbuyorsell Bitcoininlocal currencyandtomakeonlinepaymentsonthousandsofwebsites.In January 2017, BitPagos rebranded as Ripio.Ripio has over 100k users in Latin America.2.b. Ripio CreditIn2016,RipiolaunchedagroundbreakingcreditservicecalledRipioCredit,reaching the finals at TechCrunch Disrupt,[5] and revealing the innovative service to the world.Ripio Credit currentlyextendscredit toRipiousers, allowingthemtofinancetheir online payments in installments, using bitcoin as the transaction vehicle. This alternative credit facility is available to individuals without acredit cardorabank account,anditrepresentsaservicethatnootherBitcoinwalletcompanyhadoffered before.Out of an Argentina-based entity, the company loans its own funds to borrowers inArgentina in order to provide the Ripio Credit service. The company works with localRipio International Limitedhttps//workPage 5 counsel to ensure compliance with all appropriate lending, data privacy, and financialservices laws, and the company currently provides Ripio Credit services only toborrowers in Argentina.2.c. MilestonesRipio International Limitedhttps//workPage 6 3. Ripio Credit NetworkA P2P credit network based on cosigned smart contracts3.a. The P2P NetworkLeveraging the existing Ripio Credit application, theRipioCredit Network“RCN” leadstheroadtowardscreditdemocratization,offeringasolutiontotraditionalbanking system alternatives to credit access.RCNisaprotocol basedonsmartcontractsthatstandardizescreditlendingthrough blockchaintechnology.Theprotocolfacilitatesconnectionsamongseveralagents,each of whomplayaroletoultimatelyofferthelenderbettertoolstomanageitscapital, reduce the intermediationcosts betweena lender andborrower, provideincreased credit access to borrowers, and, as a result, make more projects viable.TheRipioCreditNetworkcanconnectborrowers,lenders,andothernetworkagentsall overtheworld,allowingeachoneofthemtomanagethecreditintheirlocalcurrencies, aslongastheyhaveInternetaccess.First,theRCNconnectsanagentwithination on the borrower’s identity to an agent who analyzes the borrower’s credit risk impartially.Next,theRCNenablesthesharingofthisinationwithacosigner,who isanagentthatprovidesaguaranteeontheloan;thecosignernotonlyreducesdefault risk for the lender, but it couldalsodiversifyitsowncredit riskbyguaranteeinga number of loans – hence reducing and in some cases neutralizing that risk. In addition, inthe case of a default, the cosigner may managetheunpaiddebtsina traditional way e.g., through a debt collection process.[Diagram the Ripio Credit Network]At the time of the network launch, RCN will consist of the following agents- The Borrower who makes a credit request from its wallet provider.- The Lender who invests by lending funds via a Credit Exchange.Ripio International Limitedhttps//workPage 7 - TheWalletProviderwhogeneratesasmartcontracttoispecifythetermsof the loan, ii receive funds fromthe Lenders via Credit Exchanges, andiii distribute these funds to Borrowers and other agents, as applicable andas specified by the terms of the smart contract.- The Scoring Agent provides a credit score for each Borrower.- The Oracle sets the price feedof the RCNTokenaccording to the Wallet Provider’slocalcurrency,whichisusedtodeterminetheexchangeratebetween local currency andRCNTokens at the time the loaniscutedandwhen subsequent repayments are made.- The ID Verifier verifies the Borrowers identity.- The CosignerwhoactsasaguarantorforBorrowers,andwhomayactasan intermediaryagentbetweentheBorrowerandthelocallegalsystemintheevent a Borrower defaults.- TheCreditExchangeallowstheLender’soffertoextendcredittomatchwitha Borrower’s request for credit via a smart contract generatedby the Wallet Provider.3.b. RCN TokensAlthoughBorrowersandLenderswilllikelyprefertodenominatecredittransactionsin alocalcurrency,RCNTokenswillberequiredtofacilitatetransactionsamongtheother agentsintheRCN,asfurtherdescribedbelow.RCNTokenswillberequiredtoaccess the RCNnetwork giventhat agents fees andobligations –plusthecorresponding distributionexpenseswithinthenetwork–aredrivenbytheuseofthesetokens.RCN Tokens also act asanincentivetoeachoneof itsparticipant agentstocontinueto participate in the network.3.c. The Smart ContractThe“smartcontract,”generatedbytheWalletProviderandcutedwhenmatchedby theCreditExchange,containstherelevantcreditterms,Borrowerobligations,eventsof default,andsignaturesorverificationsfromeachoftheotheragents,asapplicable.RCN TokenswillfacilitateinteractionwiththesmartcontractamongagentswithintheRCN. EachcreditflowstartswiththeBorrowerwhomakesacreditrequest.TheBorrower perstherequestfromitsWalletProvider,whichhasalreadyintegratedtotheRCN protocol, and then the Borrower waits for an approval.TheWalletProvideri.e.,anyentitythatwantstooffercreditservicestoitsusersviathe RCN addsinationabout theBorroweranditscreditrequest,generatesasmart contract,andthenbroadcastsittothenetwork.Borrowerswillonlyconnectwiththe RCNthrough a Wallet Provider. As a conditionto using any software or services providedbyRipiototheRCN,eachWalletProvidermustwarrantitscompliancewith allapplicableregulatoryframeworksforthejurisdictionsinwhichtheWalletProvider offers its services, including any applicable lending laws.The Oracle providestheserviceof iningtheexchangeratebetweenanygiven currencyusedbyaWalletProvider,CreditExchange,Borrower,orLender,andRCN Tokens,atanytimeitisconsulted.TheOraclewillmostfrequentlybeconsultedatthe time a loanis originated, andduring thecredit lifetimeinordertodetermineits inst