Session 4 - Creditcoin Ecosystem - Lake Harding Association

Session 4 – Creditcoin Ecosystem

Session 4 – Creditcoin Ecosystem

By Micah Moen 0 Comment October 8, 2019


Hello, I’m Korea’s Regional Director Kyungsuk Lee who will present to you about Creditcoin’s Ecosystem today. It’s a pleasure to meet you today in person, after only meeting you online through Kakao Talk or Telegram Through the 3 presentations done
by our CEO Tae-lim Oh, I believe it has allowed you to better understand how we see blockchain and have developed it. I will now briefly explain how Creditcoin will be used in its ecosystem. Normally when talking about an ecosystem, we talk about how the components that make up the ecosystem interact with each other. Like other cryptocurrency ecosystems, Creditcoin’s ecosystem is largely consisted of five components Which are miners, traders, hoarders,
lenders, and borrowers. First, I will talk about miners. It is not an overstatement to say that mining is the basis of all cryptocurrency ecosystems and not only Creditcoin. Mining is often compared to the
photosynthesis of plants. As plants change sunlight to life energy, miners have the core roles that provide energy to the chains using electricity.   These miners create blocks by collecting transaction history, and these blocks join to form blockchains. As miners trade the cryptocurrency received as a reward to fiat currency, the second component, traders, are born. Traders exist to earn profit between
cryptocurrencies and fiat currencies. They normally trade cryptocurrency through exchanges, and take a role of determining prices through supply and demand. Their major role in the ecosystem’s circulation is to provide liquidity in between cryptocurrency and fiat currency. Next is the investors. In the general cryptocurrency ecosystem, the role of a store or merchant is taken by  investors or lenders in Creditcoin.  As merchants earn trading profits by providing goods, lenders provide goods and earn interest profits. They gain an opportunity to invest in relatively safe and high return products in the Developing Nations using Creditcoin’s credit records. There is a distinction with other ecosystems here. Normally, since cryptocurrencies used as payments have to be converted to a fiat currency,  the increased demand for payment causes increased supply for exchange. However, Creditcoin is not a means to provide goods, but it mediates loans and creates bonds. Therefore, as the ecosystem becomes more active, Creditcoin maintains a higher usage
rate than other cryptocurrencies. Since there is a lender,
there must naturally be a borrower. The biggest obstacle when getting a loan in the financial
world is the absence of credit history. People without credit history must inevitably borrow money at a high rate because they do not have other ways to prove their integrity. In the case of Nigeria, people pay a high monthly interest rate of 1~10%. Creditcoin may not immediately create a credit history, but if they constantly gather repayment records on blockchain, they will be able to get reasonable loans in the long term. Especially, if a company like AELLA CREDIT that scores credit based on non-financial data accompanies them, the process will be accelerated. Next are hoarders. Hoarders are people who empathize on a certain cryptocurrency’s vision, invest in the potentiality, and then hold on to it until the value is recognized. As these people, big players, increase, the amount of circulation in the market decreases, and the coin’s individual value naturally rises For example, the majority of Bitcoins
are currently dormant in wallets. We have briefly covered the 5 components
that consist the Creditcoin. Now, I will explain how they interchange and circulate in the ecosystem through a simple diagram. First of all, I will talk about miners. As miners operate nodes and start mining coins, the ecosystem starts to circulate. As the nodes circulate, the ecosystem goes online and
coins start to be released.  The coins that you have purchased through private sales start to be released through vesting at this stage. Mined coins are sold to traders through exchanges and etc. At this point, the exchange is online. The price is formed for the first time
and liquidity supply begins. As coins circulate in the market and borrowers connect, the actual usage, which we always dreamt of, finally starts. At this point, partner companies start purchasing additional coins in the marketn as well. Creditcoin creates bonds by observing the flow of goods in other public chains. Like Gluwa Coin, which is a stable coin, Creditcoin allows diverse coins in the public chain such as Bitcoin or Ethereum to be
connected with the loan time. At this stage, the market entry speed depends on the business partner’s competency, and therefore the ties with partners is critically important. To take a quick look at our partners, I have summarized a couple of our main partners. First, we have AELLA CREDIT, which is a company rapidly growing in Nigeria. The CEO is here today and will present after me AELLA CREDIT has received investment from Y COMBINATOR, one of the most famous startup accelerators. Also, their business competency has been recognized by getting investment from Coinbase CEO and etc. By using employer loans and
non-financial data to score credit, this company is showing a low delinquency rate of 5%despite the absurdly high interest rates. Second, we are cooperating with Blue Index, which is a partner firm of Seoul Auction Blue. Blue Index is in charge of Seoul Auction Blue’s INT or P2P and is also deeply related with our business. Right below, Crassus Fund is P2P platform that Koincore is preparing. Since many domestic P2P companies have high delinquency rates they are preparing to cooperate with other P2P companies to form credit history that embraces the domestic P2P market. Furthermore, many social enterprises consider the model of providing credit history in the 3rd world to have a positive social influence and is showing their interest. If the lender and borrower are connected through this process, there is a commission fee that occurs when using the network for transaction.  The commission is distributed to the miners and becomes a driving force that helps maintain a stable network. As the network becomes stable
and ecosystem circulates, I believe hoarders who bet on the future and invest in the long term will start to emerge. Consequently, circulation decreases, coin prices forms, and people who dream of a positive future enter, which becomes a virtuous cycle. Up to this point is what we internally
call Creditcoin Phase 1 Currently the part for Creditcoin’s commission distribution to miners is not included. We internally decided to further analyze this in order to provide an appropriate method of commission for diverse transactions, we plan to lock-up the commission for one year and then return them to users. During this period, we plan to
have a low commission rate than normal so users will have
less burden to use it as a test. When the ecosystem reaches maturity,
Phase 2 starts. At this point we will introduce Hard Fork, and from Phase 2, commission fees are no longer locked up but provided to miners to stabilize
node operation when mining. Also, we plan to provide a function that allows users to get security loans through coins issued in STO form. Earlier, our CEO Tae-lim Oh said that we did not include the security loan function, but as he had explained earlier, we do not have any STO projects that are suitable yet, so we have not included them in Phase 1. Credit history starts to form through the process of bond creation and repayment. From this stage, Creditcoin starts to function as a credit history network infrastructure. We expect that credit history created in public chain based on Creditcoin transaction history will allow  the financially exclued community to take advantage of financial benefits. Currently the global unbanked
population is about 1.7 billion. The biggest issue for the unbanked is that they do not have credit history due to a lack of infrastructure. They do not have a solution because there is no infrastructure. Fortunately, we are able to solve this problem well. Currently, AELLA CREDIT is receiving over 1,000 loan interest rates per hour. As previously mentioned, they are showing a delinquency rate of 5% despite the outrageous interest rate of over 40%. If AELLA CREDIT acquires a trustworthy credit history network, we will experience an extraordinary synergy effect. Finally, Creditcoin functions as an
infrastructure rather than a service. (Should I say it’s easy to apply in various situations?)It will have an incredible expandability. Last but not least, I will give an example before concluding my presentation. As mentioned before, social enterprises have interest in Creditcoin’s ecosystem.  We are working with social enterprises with a model that receives donations through foundations, provides low interest rate loans to high risk category people through companies like AELLA CREDIT, provides credit score education and creates credit history for those people.  Consequently, people who were in high risk category may become eligible to receive additional loans. I cannot talk further on this because we do not have an outcome yet, but I strongly believe that we will be able to bring good news soon. This concludes my presentation
on the Creditcoin Ecosystem.  We would appreciate your constant support and interest in our ecosystem. Thank you.

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