Depository Network
We will start off by explaining blockchain because it is the technology aimed at revolutionizing several industries through its immutable, transparent and decentralized nature. Blockchain itself can’t be effective unless it is used in a way that utilizes its true potential. Depository Network is the first-ever ecosystem which provides the financial and credit institutions an option to accept cryptocurrencies as a collateral for loans. This B2B platform connects blockchain technology and traditional finance. It will help people to use digital currencies in the traditional lending system. The first-ever platform to utilize digital coins as a collateral
The charm of this platform is that it has explored a new way of utilizing digital currencies. We know that digital assets are so far not been accepted as a real asset anywhere in the world. In the age of the internet where everything has turned digital, currencies should also be accepted and utilized in the digital form. Digital assets are a new form of assets and they have a value which can be exchanged for real money. It is also being used on several online grocery stores, airlines, hotels, bars and in many other areas. Depository Network is the first-ever platform which has given the financial and credit institutions an option to accept digital currencies as collateral.
A decentralized depository platform
This ecosystem is a decentralized platform where all the lending institutions can develop their own depositories platform within the system. As we know that the current depositories are state-owned and centralized which lack trust and efficiency, this venture uses secure wallets for storing digital assets and smart contracts for executing the transactions. The borrower is required to provide signatures in order to grant access to the assets. The wallets use multi-layered securities with three, four and five signatures as per the value of the collateral.
Some prominent features of the platform
All the participants of a transaction are updated about any changes in the value of a collateral. Information on the platform is encrypted and only authorized users can access it. This multi-rewarding system also eliminates the need for any intermediaries which results in reduced costs. Since the system is decentralized therefore there is no need for any regulatory compliance for the participants. As we know that smart contracts help transactions being processed on meeting the set conditions, therefore it is more trustworthy.
How the platform works
The process is simple. In the first place lenders set up their depository platform on the network and define the terms for offering loans. In the second place, the borrower approaches the lender and they sign a loan agreement and create a wallet on the Depository network. The collateral is stored in a wallet which is secured with at least three signatures (for the Depository network, for the borrower and for the lender) and the smart contract is activated. However, the borrower submits the collateral in digital assets and receives the money in fiat currency. On meeting the conditions of the contract, the collateral is released to the borrower. This sums up the whole process of Depository Network ecosystem. Useful Links:
Auther's Details:
Raihan Shakeel
Eth Address: 0x7E676D85d45acc57A7483F3DE33BF6E87A42b10e
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