ZV Chain Blockshow Asia| Presentation on Blockchain Financial Solutions for SMEs
The BLOCKSHOW ASIA 2019 sponsored by Cointelegraph was held on November 15th. The blockchain leaders, technical dignitaries, experts and scholars from all walks of life gathered in Singapore. ZVChain co-founder Hua Lei also invited them.
Ms. Hua Lei’s speech titled “ZVChain — Empowering SMEs”, the following is a speech:
The financial ecosystem has existed for thousands of years, and the monetary system has promoted the development of civilization. Every day, our global financial system transfers trillions of dollars to serve billions of people. However, in today’s digital age, the efficiency of this system is not good. There are many unresolved issues, such as agency fees and efficiency delays, extra and heavy intermediate costs, which also increase the risk of fraud and cybercrime.
To date, 45% of financial intermediaries such as payment networks, stock exchanges, and remittance services have suffered economic crimes each year, accounting for 37% of the total economy. R&D costs continue to rise and remain a top concern for bankers. Ultimately, this process will increase the cost of the process and consumers will bear these burdens.
What is the reason for the inefficiency of the financial system?
• First, because it is a traditional legacy system that involves paper documents and the old financial system, making it inefficient and non-scalable.
• Second, because it is a centralized process, it is vulnerable to system failures and attacks.
• Third, because this system is exclusive, billions of people still lack access to basic financial instruments, and the local centralized financial system is lacking.
The financial system is fragile, but fortunately the blockchain is a better solution to the problems of legacy and restrictive financial systems.
Today, many entrepreneurs are trying to use blockchain technology to spread financial systems and services, reduce middlemen, increase efficiency, make them cheaper, faster, and safer.
So, how big is the potential decentralized market?
In theory it may be 18,000 billion! Because the financial system is now centralized, it can be replaced by a decentralized system, so the theoretically potential market is the entire centralized financial market.
China’s GDP is about 10 trillion US dollars, the United States is about 20 trillion US dollars, plus the other 40 trillion US dollars in Europe, an average of 4.5% of income is generated by the financial industry. Why do these financial industries pay banks, lawyers, accountants and investment banks because they provide centralized financial services. In theory, these people create the future GDP is likely to be replaced by financial decentralization, it is about conversion of 18,000 billion.
Indeed, there are already various defi applications that have been developed and attempted to replace previous financial services, and the defi ecosystem built on eth has more than a few projects already offering different services.
But how big is the current defi market? The chart below is a graph of the total value of Defi locked on eth, which is about $600 million, which is basically the full value of the current defi market. If we build a defi market on top of other blockchains (such as EOS), it could exceed 1 billion. Therefore, this means that the defi market is still in its early stages, and we still have a long way to go and opportunities.
Understanding the opportunities, we need to understand the pains of traditional finance and the current defense market, and how do we solve it?
What is the pain point in the DeFi market? what can we do?
There are many reasons for the lack of market, one of which is the dependence on Ethereum, because Ethereum’s smart contracts are easy to develop. So, the DeFi application was originally developed using Ethereum, but scalability issues still limit the number of engagements.
In addition, the user experience needs to be improved. Compared to traditional Internet products (such as grab pay or Alipay), once an account is registered, an application can be used to implement different services, such as payment, purchase of different financial products, and other services. But in the world of encryption, you have to download different wallets to access different DeFi services, multiple times to perform kyc and use different services in different applications, which is very troublesome.
The third point is the current limited chain assets. We can only do some DeFi financial products based on Ethereum, EOS and even some bitcoins, which is not enough. We also need to consider how to wind up traditional financial assets (such as stocks and indices) and offline assets (such as houses, forests and cars).
How will ZVChain provide the solutions?
Based on this, the ZVChain team hopes to find a solution that suits the current situation. First, we hope to address security and scalability issues by using the Chiron Consensus Algorithm to extend the functionality of the underlying infrastructure. As an innovative consensus mechanism, Chiron has high performance and high fault tolerance on heterogeneous peer-to-peer networks.
Chiron integrates two leading edge encryption technologies, VRF and BLS. The VRF guarantees the privacy and randomness of the proposal and prevents malicious attacks. The BLS can ensure that the candidate blocks can quickly reach a consensus within the verification group, and the signature is unique and the amount of data is the smallest.
Chiron’s underlying layer leverages a highly transparent NAT-based packet efficient communication model to ensure real-time data communication between peer groups.
ZVChain dual account system
We offer a dual-account system that complies with traditional financial logic , which is essential and indispensable for the application market. We all know that one advantage of blockchain is transparency, but to some extent it is a shortcoming of large-scale application of blockchains in the real world.
In the business world, we don’t want to share business secrets with others. If we have a million transactions between us, obviously we don’t want the entire network to know about it. However, due to the nature of the blockchain itself, in the current public chain design logic, commercial privacy protection is impossible. Some people may say that anonymous currency will be a good solution. Yes, anonymous currency protects the user’s privacy and data, but at the same time it does not comply with regulation, which means that when someone does evil in the system, we can’t target the perpetrator.
In this context, we want to design a dual account system, including a base account and an anonymous account. All business activities will occur in the anonymous account, and the data in this anonymous account will be encrypted to ensure the privacy of the user, which is obtained after the KYC is completed by the basic account. When it is necessary to cooperate with the regulatory requirements, the corresponding relationship between the basic account and the anonymous account can be located under the consensus of the guard node.
ZVChain stable currency model
The basic idea of ZVChain stabilized coins is similar to Makerdao . But we use cross-chain technology, so that it is not only the assets on ZVChain, but other major digital assets can be exchanged for wzvc, which represents the basic currency used by the ZVChain stable currency system. Then we use smart contracts to mortgage debt and settle.
On this basis, not only different digital assets can be issued on ZVChain, but also can be used for physical or offline assets. On this model, we need to work with an independent agent.
The picture above is a real case of the plastic supply chain. From suppliers to merchants, there are many small and medium-sized middlemen. Plastic prices fluctuate every day and current prices are determined by future prices. Among these small and medium-sized middlemen, they will exchange bills with their peers one-on-one through paper contracts.
Usually, they only need to pay a 20% deposit to get the ticket. Only when the actual delivery behavior occurs, they need to pay the rest of the amount. Therefore, if one of these intermediaries defaults, this means that the entire supply chain will be affected. And because of the paper contract or the verbal contract, it means that it has a high risk of default.
We imagine that when there is only one version of the book in a world, all parties can see it. You can instantly see the status of customer billing, supply chain logistics and other transaction records, and the world will become a new form.
Security can be guaranteed by deploying smart contracts on the ledger. Deployers can plan smart securities that can include both transaction and lifecycle management functions.
Investors can place securities directly on the ledger and manage them through the wallet application without the need for a middleman. By then they may need professional services to help manage investments, such as investing in their liquidity and managing collateral. And the use of trust services, such as protecting keys from loss or verifying the contents of a wallet on behalf of a third party investor.
By that time, the whole world will be very different.
But this is just the beginning, but we believe that one day we will achieve this vision!
Above is a transcript for the actual presentation on BlockShow asia 2019. To follow-up on the event review at BlockShow Asia, do visit here.
Official ZV Chain Channels :
Join our official community channels:
