So here's our Moonshot... but not really.
A fellow Chef once used the phrase “Lending without Fear” to describe the protocol we are developing. It could also be remarked that “Borrowing without Oppression” is to be the flip side of that same coin.
Lending money, even to a friend, has always been a leap of faith. It’s not just how much you know a person, it’s how well you have read the circumstances that have buoyed such a request in the first place. And in entering into a creditor-debtor relationship, especially with people you seemingly trust, you are opening your arms and exposing your heart to a flippant game of chance.
Now lending to total strangers … we are looking at a completely different ballgame altogether. “Isn’t that for the big banks and financial institutions with their battery of mathematicians, sophisticated risk management algorithms and well-oiled machinery for debt recovery?” one is inclined to ask. How do we, as ordinary folks, bridge the issue of “Trust” when lending to people we know absolutely nothing about. Except the fact that they are humans. And unfortunately so, that to be human is to err in various degrees of I-Fucked-it-Up?
Hodl on to that thought, we’ll circle back.
Let us look into the world of centralised finance and ask ourselves why it was there in the first place.
People brew up ideas all day long. Out of some of these ideas, a dream may foster. Some of us may want to turn those dreams into something material to be shared with others. Like opening a pizza place because you think you bake a mean crust. Or launch a skate shop because you forged a way to collaborate with artists to create beautiful cruisers.
This is where you imagine the scene of some passionate guy projecting his vision to a bunch of suits and Powerpointing his way to a loan. And as you would know it, banks will ask for income statements, business track records, collaterals, guarantors and a host of other assurances which pretty much eliminate the average Joes, middle working classes, the retired and the financially encumbered from the prospects of ever getting a loan. In other words, those that really need the money to break free from the shackles of debt slavery. They get no love.
Something does seem “off” when traditional banking institutions have become so risk-adverse when it comes to the little guy in the street; yet irresponsibly wanton when it comes to putting their money into risky investment vehicles fabricated for Wall Street. That is bad news for the little guy trying to borrow.
Back to the issue of trust. Banks, through its evolution from “middlemen services” ran by old-world goldsmiths to powerful enterprises that financed voyages for the colonial conquests of early 17th Century, and to the now guarded, overextended and centralised institutions that we now go to for financial facilitation.
A “Trustless System”, as contradictory as it may sound, is where you can lay your absolute faith in a system. This system relies on the disintermediated execution of pure code, untampered by subjective human intervention and therefore free from corruption.
This digital dimension is where our Uncollateralised Loan (UCL) protocol will be set in motion and put into service for exactly those people who were marginalised by the old system. You don’t have to trust anyone or any horde of operatives scheming in a board room. You need only trust the decentralised community, the full transparency of the “smart contracts” and the pure objectivity of the code.
These are the foundations for which Decentralised Banking are built upon. And so that applies for every De-Fi platform out there. I’ll come to explain what makes UCL special in just a bit.
Now the Big Bang that is the Decentralised Exchanges (DEX), had burst onto the scene and saved the day. They also serve to inaugurate the plausibility of a functioning DeFi universe. Peer to Peer lending is now possible. Although, perhaps, still not safe. And therefore for most, it still requires a huge chunk of collateral (usually much more than the loaned amount in an viable crypto to accommodate volatility and impermanent losses) from the borrowers. So now we have a system. Though not a perfect one.
UCL, our Uncollateralised Lending protocol is set to change all that. The key is in “wrapping” a loaned-off crypto in a layer of code that will effectively and automatically “retrieve” those “marked” crypto upon the maturity of the term loan or at periodical due dates in the case of an instalment plan.
How this is achieved is, at the moment, proprietary for the obvious reason of retaining “first-mover” bragging rights. But it will, of course, be fully transparent and absolutely loyal to the spirit of blockchain upon launch.
Successfully implemented, It will accomplish three things through its totally auditable smart contracts:
- Eliminate Risk
Not a reduction of risk. The Elimination of it. Only possible now, through the use of blockchain protocols and complex layers of smart contracts. We have found a way to be mathematician, logician, jury and lawman all rolled into one; so that our lenders can focus on watching their cryptos go where it needs to be, and ideally come back home with some nice souvenirs.
- Amass Liquidity.
By Eliminating Risk, we will be building a modest bench for which investment funds, or liquidity if you will, must come in avalanches and waves. Of course, with the open-source nature of blockchain protocols, imitators will flood the scene. But in doing so, the ecosystem flourishes. But whatever benefits the ecosystem will definitely nourish and grow UCL.
- Finance Cutting Edge Innovation
The DApps and Metaverse are two innovations that will likely NOT get funded the traditional way. Not for the lack of inventiveness, but rather the imperceptibly routine collision of disruptive ideas that bears no track record for which traditional bankers are most afraid to finance. UCL erects the stage, and at times offer the limelight for exciting new projects that help create a better world. And because of the first 2 achievements, this 3rd accomplishment come naturally. We know the terrain, lets us be your tour guide.
The future really isn’t certain, and we can’t promise it will be. From one spectrum; China’s growing paranoia of unsanctionable cryptocurrencies and her laughable attempts to uproot an inevitably revolutionary technology via hardware displacement. To the other extreme; of an experimental project that cumulated in the birth of Bitcoin Beach in Al Salvador, a country brave enough to make bitcoin its legal tender so that people can buy Avocados and Starbucks with crypto. We see adoption everywhere, in various levels of intensity, as the world starts to see the silent logic of an emerging New World Order, and the hypocrisy of a decaying one.
We intend very much to stay for the long haul. Let’s leave the middleman to innocuous and impartial computers and their sacred code while we dance in the rain and chase after the rainbows. Here’s to coming to terms with No More Terms but your own.
And to the banks of the world, our digital medius send their warm regards.