“The value of Defi assets formed by custodial assets”
Fintech, which is closely related to our lives, is a combination of fin from the terminology of finance and tech as well from technology. In the real economy, we have been living our economic activities by exchanging fiat currency as tangible currency. However, by the development of technology, e-commerce, online markets, and Internet banking led by credit cards and check cards, economic activities have become possible without directly exchanging banknotes. Up to now, traditional finance has been a market economy based on custodial assets called fiat currency guaranteed by the central bank and the government. However, in 2008, the cryptocurrency market emerged due to a technology called blockchain invented by a programmer under the pseudonym Satoshi Nakamoto. However, the cryptocurrency market has no grounds for value, unlike custodial asset in traditional finance, which has evidence or value grounds, so the formation of cryptocurrency price has problems like speculation by manipulating networks or platforms.
To solve these problems, CenterPrime is trying to build a new healthy Defi economy that is synthesized with the cryptocurrency market by providing evidence or value by the form of traditional finance. The terminology Defi means decentralized finance. In other words, decentralization means making transactions between individuals without intermediaries while traditional commercial banks, central banks, or governments are requiring intermediaries. Therefore, Defi is called a non-custodial asset. However, what will be going to prove the transactions between individuals? Where does the value of the virtual currency will derive from? Why did the price of Bitcoin suddenly went from KRW 9 million to KRW 30 million and then fell down to KRW 20 million again? Because of the unclear answer to those questions, there are problems like speculation and manipulating mentioned above.
The original purpose of blockchain technology was to transfer and store data that is accurate and cannot be changed or hacked with since blockchain technology connects blocks (data chunks) to blocks like in the form of a chain. Through this, we can see that the original purpose has changed in the wrong way. Then now, what if we trade virtual currencies between individuals based on deposits or values? What if we use this traditional financial currency (fiat currency) in the Defi as we use it in traditional finance instead of virtual currencies without grounds to trust? The use of the existing altered blockchain technology in the cryptocurrency market will develop into a Defi asset that can be used for reception, loan, settlement, and investment with a healthy and reliable real economy financial service based on custodial assets.
The CenterPrime project uses a hyperledger private chain to share an open banking API to apps, connecting centralized finance and decentralized finance, and making smart pairing data for loan, remittance, exchange, payment, and exchange rate information able to be included in fintech oracle networks.