With our first public token release scheduled for September 25th, we thought it was important to update the community on the progress to date, as well as the overall direction of the network.
Jibrel’s Mission & Vision
Mission
To leverage blockchain technology and cryptography to fully automate and decentralize consumer / retail banking (and respective investment banking activities).
Backstory
The average age of the Jibrel team is currently 31. Most of us graduated university during or around the 2007–2008 global financial crisis and felt the full brunt of it with regards to employment opportunities.
During the crisis, most believed the financial system to be broken. However, the system itself wasn’t broken. Similar to most system failures, human error and subjectivity drove the eventual collapse.
Consumer Banking Today
Traditional banking, the process of issuing debt, securitizing it, reselling it, etc. is an effective tool in allocating capital efficiently. That being said, conflicting incentive structures, convoluted processes, bloated organizations, and an array of other problems, plague existing systems, causing them to fail repeatedly.
Technology has already permeated almost every facet of banking.
- Underwriting: A large number of consumer loan / mortgage applications are approved or rejected algorithmically.
- Securitization: Loans or mortgages are aggregated into trusts based on risk profiles / appetite — again, largely methodologically, and in a lot of cases, algorithmically.
- Trading, Settlement & Clearing: Debt backed securities are bought and sold in large tranches, with returns / dividends paid out, again, with heavy algorithmic involvement.
So the mechanisms and tools exist to automate the entire funnel. But up until blockchains and cryptocurrencies, the piping was missing.
Jibrel’s Vision
Jibrel is gradually building the infrastructure to automate the consumer banking funnel. With Jibrel, it will be possible for a consumer to sign-up for a loan, get approved and make monthly payments; an investor to buy a debt backed security — and the same dollars used to pay the loan, pay-out the investor holding the security, automatically, transparently and privately — cryptographically enforced.
Jibrel Build-out
To deliver this solution, Jibrel needs to tokenize real world assets and instruments. We call the tokenized version of a real world asset or instrument a “CryptoDepository Receipt” or “CryDR” for short.
The off-chain components that need to be tokenized into CryptoDepository Receipts (CryDRs) are:
- Currencies and Commodities (for value storage and transfer)
- Debt Instruments (for automated lending)
- Securitized / Collateralized Debt Instruments (for trading)
Potential additional CryDRs:
- Options
- Futures
Supporting mechanisms that need to be built-out are:
1. CryDR Architecture: architecture that allows ERC20 tokens to be governed by decentralized rules — while still allowing for these rules to be updated
2. Smart Regulation: rule-sets from real-world regulation translated into solidity
3. Off-chain credit / risk models: build-out of the necessary risk management capabilities off-chain
Supporting infrastructure components that need to be built-out:
1. ERC-20 wallet — Secure, robust, transparent, open-source
2. Block Explorer — CryDR specific token explorer
3. Jibrel Platform — Self tokenization of real world assets (for licensed financial institutions)
Progress to Date
We launched our alpha on ropsten (ethereum test net) towards the end of May and completed the complementary front-end development in June. This alpha was a simple react front-end that relied on MetaMask for a connection to our smart contracts deployed on ropsten.
This alpha demonstrated CryptoDepository Receipts (CryDRs) and ‘Smart Regulation’.
The alpha was a simple barebones example of how certain tokenized assets can adhere to real-world regulations, although completely decentralized.
We demonstrated two types of CryDRs, fiat and bonds. USD, EUR and a US Treasury Bill.
We demonstrated how the treasury bill could be held by a specific set of users, and could only be sold by a subsect of those users.
I.e. A licensed broker will be able to send treasury bill tokens to buyers, but the buyers will only be able to send it back to the broker (no other wallets) — as they are not licensed to resell the treasury bill.
Smart Regulation — Governance without governments.
After the proof of concept was complete, the team started working on an beta that would form the foundation of Jibrel.
This beta contained the necessary architecture to provide upgradable smart contracts. So that smart regulation could be updated as well as provide forward compatibility (e.g. ERC223 token standard).
Updates continue to be made on the back-end, and the team has engaged New Alchemy to conduct a full security audit.
In parallel to back-end development, the front-end team has been busy refreshing all the Jibrel’s look and feel, as well as developing the Jwallet.
The Jwallet is a critical piece of supporting infrastructure. With no robust Ethereum wallets available, with numerous hacks in the last few weeks alone, the team sought out to build its own.
Most wallets have to make the decision to either sacrifice security or usability.
The user either needs to rely on a third party to store keys (sacrificing security) or host the keys at the cost of user experience (usability).
The only reliable out of the box solution available today is MetaMask. However, it doesn’t make a whole lot of sense to store large amounts of value in a Chrome extension.
The Jwallet takes a unique approach to this.
The site itself holds no user data and all keys are stored locally. The wallet itself can be run locally and is of course, open source.
The interface is simple and sleek, and provides a simple way to store, transfer and convert ERC20 tokens. A mobile version is also available.
In addition, certain standards have not been defined for Ethereum / ERC20, so the team built out the necessary components and standards and submitted them on relevant Ethereum Improvement Proposals (EIPs).
The first component was a standard URI scheme and QR generator.
The Jibrel team completed this as part of the Jwallet, created an easy to use plug-in, and released it under an MIT Open License.
Today / Network Launch
With CryDR architecture deployed and the wallet nearly complete, the team will be able to launch the first two Jibrel products:
- Jwallet: Best in class ERC20 token wallet
- Jcash: 6 fiat currencies available as Smart ERC20 tokens (CryDRs)
We expect to launch these shortly after the close of the Jibrel Network Token (JNT) pre-sale.
Users will be able to purchase jUSD, jEUR, jGBP, jAED, jRUB and jCNY tokens.
The final component, is Jibrel Network Token (JNT) — the underlying economic system balancing the network
Jibrel Network Token (JNT)
Jibrel Network Token is the virtual exchange currency of Jibrel and the currency used to interact with the Jibrel DAO.
- Purpose: Virtual Exchange Currency — On the first release, Users will be able to exchange JNT for currency tokens such as (USD, EUR, GBP, RUB, CNY, AED).
In the future, Users will be able to exchange JNT for a wide range of assets.
Mechanics — A Dedicated Token
A dedicated token is needed to power Jibrel in order to establish equilibrium / duality in the system. Jibrel maintains an off-chain portfolio of assets and the Jibrel Network Token is used as a medium between on-chain and off-chain value.
A tethered token cannot be backed by ETH or BTC, as they are too volatile. If Jibrel were to issue tethered tokens and hold ETH or BTC, it would be susceptible to market / credit risks.
In addition, JNT is consumed in the network as ‘gas’, ensuring a steady stream of JNT is recycled back to the Jibrel DAO.
Scenario A. JNT appreciates in price (i.e. people are utilizing the network and purchasing JNT and exchanging it for tokenized assets)
- Alice purchases 50 JNT on a cryptocurrency exchange for 10 USD (@ price US$0.20).
- Alice exchanges 50 JNT for 10 jUSD (Jibrel USD) through the Jibrel DAO.
- JNT doubles in price to US$ 0.40 — the Jibrel DAO now owes Alice 25 JNT
- Jibrel DAO liquidates 10 JNT for 4 USD (buffer — still has 40 JNT)
- Jibrel AG (Fund) takes ownership of 4 USD
- Jibrel DAO mints 4 new jUSD tokens
Scenario B. JNT depreciates in price (i.e. people are not utilizing the network and are selling their tokenized assets / JNT)
- Alice purchases 50 JNT on a cryptocurrency exchange for 10 USD (@ price US$0.20).
- Alice exchanges 50 JNT for 10 jUSD (Jibrel USD) through the Jibrel DAO.
- JNT decreases in price to US$ 0.02 — the Jibrel DAO now owes Alice 500 JNT but only holds 50 JNT.
- Jibrel AG (fund) liquidates 9 USD
- Jibrel DAO purchases 450 JNT @ US$ 0.02 (also providing JNT price support)
- Jibrel DAO returns 500 JNT to Alice
Scenario C & D. Underlying asset appreciates / depreciates in price
Given the underlying asset or a highly correlated asset of equal value is held by the Jibrel AG Fund, the Jibrel DAO can always have enough access to liquidity to meet its JNT obligations
Recession Proofing
In the examples above, we examined what happens with volatility in Jibrel Network Token. But safeguards need to also be put in place to protect against volatility in the crypto and traditional economies.
CryptoEconomy
With a correction expected in the short to medium term, exposure in digital assets will be limited to only what the Jibrel DAO requires to operate seamlessly (i.e. sufficient BTC / ETH to purchase / sell JNT and adjust balances accordingly).
In the event of a complete collapse of the CryptoEconomy, the Jibrel AG Fund (off-chain) will have the resources to meet all on-chain and off-chain obligations.
Traditional Economy
While the off-chain fund will not directly hold all the assets it issues on-chain, it will always maintain a one to one value and correlation. For example, by holding USD, Jibrel can represent numerous currencies on-chain, which are pegged to the US Dollar in the real-world.
In order to maintain solvency at all times, the Jibrel DAO / Jibrel Fund must maintain a one-to-one ratio with regard to value and correlation.
In the event of a crash in the traditional economy, the Jibrel AG Fund will maintain a sufficiently diverse and robust off-chain portfolio (e.g. US Treasury Bills, CDs, etc.) and increase its digital asset holdings (on-chain).
Token Sales
Three overall token sale rounds will be conducted.
Jibrel completed an Angel Round through a “Simple Agreement for Future Tokens”. On September 25th, we will JNT at a price of US$0.20. The remaining tokens will be sold during full network launch on November 27th at a price of US$0.25.
Our token sale gives users the opportunity to purchase Jibrel Network Tokens (JNT) which power the underlying mechanics of the network.
Token Sale Proceeds
The majority of the token sale proceeds will go towards stocking the Jibrel DAO with the necessary digital assets to remain solvent at all times, as well as the Jibrel AG fund with the necessary traditional assets to remain correlated to CryDR liabilities held by the Jibrel DAO.
Debt Instruments, Securitized / Collateralized Instruments
With the architecture built-out, the network will be able to begin piloting an on-chain completely automated consumer banking funnel. We are currently in advanced talks with strategic banking partners to conduct a pilot.
Strategic Partners
Jibrel is engaged with New Alchemy for Security Audits and PwC for financial audits. In addition, we have formed a strategic agreement with Arabian Chain to bring smart regulation to MENA markets, as well as TaaS fund to provide smart tokens (CryDRs).
Legal
Jibrel AG is a registered entity in Zug, Switzerland and is responsible for the development of the network. Jibrel team has undertaken the necessary legal and compliance measures to ensure a fully compliant token sale.
For this reason, certain jurisdictions such as US, Singapore and China will not be allowed to participate in the token sale.
Jibrel provides traditional financial assets such as currencies, commodities, debt instruments and securities, as standard ERC-20 tokens, on the Ethereum blockchain. Jibrel AG is a public limited company domiciled in Zug, Switzerland.
