Some thoughts on today’s popular DeFi products
In the popular DeFi products, almost all lenders collateralize digital assets (e.g., DAI/ETH) and then lend out other digital assets.
To connect the real world with the digital world, asset originators can convert real-world assets (royalties: music royalties, novel royalties, game royalties, etc.) into passbook tokens for loan financing; by simplifying the financing process and reducing costs, the liquidity of real assets and transparency of investments can be improved.
Based on the real assets pledged by the originator, the platform analyzes the value of the real assets through the corresponding data model and then evaluates the lending amount based on other factors (market conditions/credit/asset stability, etc.) that affect lending.
Lenders can view the various mortgage agreements and select the subject matter they wish to invest in through the app provided by the platform.
Upon termination of the loan agreement, the lender will return the borrowed principal and the agreed interest; the lender (i.e., the investor) will recover the principal and the agreed interest; and the platform will provide incentives to the lender and the borrower in the form of platform currency based on the price of the underlying and other factors.
For example, game rights require funding for game development, and the development team can get funding in advance by pledging the game rights through the platform. Wait for the game to go live the capital revenue to repay the loan as well as interest.
Real asset tokenization
Asset originators can convert real-world assets (royalties: such as music royalties, novel royalties, game royalties, etc.) into pass tokens for loan financing; the platform analyzes the value of real assets based on the real assets pledged by the originators through a corresponding data model; then assess the loan amount based on other factors (market conditions, credit, asset stability, etc.) that affect the loan. L = 1 — α (where L is the proportion that can be borrowed; α is the proportion that affects borrowing)
Investors can browse through all the loan agreements and their details and then decide according to their personal preferences. Then they follow all the rules of the loan agreement and when that agreement closes the loop, they recover the principal as well as the interest specified in the agreement.
Agreement to transfer
Investors can withdraw from the product midway according to their personal needs. A request for a transfer of agreement can be initiated through the platform, pending acceptance of the request by other investors on the platform.
To motivate investors and lenders, and to promote the healthy development of the platform, the platform will reward tokens through a specific algorithm model. Investors can not only get the interest for borrowing but also get the token rewarded by the platform and enjoy the benefits of token increase brought by the steady development of the platform. Lenders will also get the token reward, and can also enjoy the benefits brought by the development of the platform.
It is possible to develop a fan economy based on the creator (music-composer, singer, novelist, filmmaker or actor, etc.), which is connected to the platform’s incentive token, as well as to ticketing services, etc., expanding the use and circulation of incentive tokens.
Platform technical architecture
The platform uses the DID (Decentralized Digital Identity) for identity management of platform participants to protect user privacy. The user DID is not given by a single authority, but is generated according to a defined algorithm (DID Spec) and also generates a pair of secret keys (public and private) where the public key is bound to the DID on distributed storage (IPFS) and the private key is kept on the user’s device (e.g. mobile phone). The personal data associated with the DID is not chained, but is stored encrypted at the issuer, with a statement issued by the issuer attesting to the user’s privacy attributes (e.g. name, age, occupation, email address, etc.), but can only be read with the user’s authorization.
Based on the DID, platform users can register once and enjoy the products and services available throughout the ecosystem.
Users from physical collateral to the final lending process, the transaction is achieved through the migration of state authentication, the state is strictly dependent on and strictly orderly, to ensure the security and credibility of the collateral, to ensure the safety of investors’ funds.