Ripio Credit Network — ICO Review

Token: RCN

ICO Start Date: October 24th

https://ripiocredit.network/

“A global credit network based on cosigned smart contracts”

TOTAL 15 / 25

1 Business opportunity: 3.5/5

Rationale behind the project: Ripio takes stock of the current credit situation: a borrower needs to go through an intermediate (a bank) to get a loan. Issues:

  • Banks do not provide cross-border loans
  • Many people are unbanked and thus do not have access to any loan
  • Gathering all the needed information to structure a loan is costly for the bank (thus increased fees)

Ripio wants to democratize the P2P loans (peer-to-peer loans) that already exist (market around $1.5B a year), allowing the following:

  • Speed-up the whole credit-granting process, reducing the lending rates
  • Cover more population (the unbanked) and deal with the cross-border issue

Ripio wants to bring P2P loans to the next level (P2P loans v2.0) by adding a user interface for the lender to manage his assets, helping on the credit risk evaluation process, and by protecting the lender more. How? Loans would be co-signed by guarantors who would back the contract (in exchange for fees) in case borrower could not pay.

Token: used to pay the fees back. Even though borrowers will use local (fiat) currency, it will be then exchanged in RCN token (at a rate decided by an Oracle). The more loans, the more RCN will be needed/exchanged = network effect.

Competitors: Everex ($19m valuation — more focused on micro-lending), Blockmason (ICO in October, $25m raised), Hero Token (ICO soon in November — more in the pawnbroker market rather than the traditional loan market though).

Questions:

  • Provided all the players involved (see part 2. Technology), we do not really see how low fees can be. The only part that will disappear is all the red tape associated to the loans but all the fees taken by each intermediate (the guarantor, the ID verifier, the scoring agent) are still there and represent the main bulk of the fees. From our understanding, those P2P loans v2.0 will concern more people (the unbanked) using cross-border loans, will be easier to implement (smart contracts) but not sure about a reduced pricing, especially since the guarantor will be key in the process and might ask for high interest rates.
  • Second interrogation is about the credit risk assessment process and the guarantors. Who will be the scoring agents (it is said that first Ripio will assume that role, which is not scalable) and who will accept to be guarantor of people with no historical information? How will scoring agent be able to do their jobs, especially when there is no information or track-record about some people?

2Technology: 2/5

Whitepaper: https://ripiocredit.network/wp/RCN%20Whitepaper%20ENG.pdf

Nothing really fancy and new. Based on typical smart contracts. Main players are:

  • Borrower​ ​who makes a credit request from the platform (the Wallet Provider)
  • Lender​ who invests by lending funds (in local currencies)
  • Oracle providing the exchange rate at any time between local currency and RCN token
  • Wallet Provider who generates a smart contract to specify the terms receive and distribute funds
  • Scoring​ ​Agent​ provides a credit score for each Borrower (using transactional information of that Borrower in the past from the RCN blockchain)
  • Cosigner who acts as a guarantor for Borrowers (and will be paid by Lenders that will accept to retrocede part of his gains to be backed)

We do not see any added value in the way technology is implemented that could give Ripio a competitive advantage over actors who would be interested in entering that market.

However, what is interesting is that Ripio plans to release the whole product in December 2017 (very soon compared to other projects), which is consistent provided the simplicity of the dev work they need to implement.

3 Team: 3.5/5

Project selected as one of 2017 breakthrough brands by Interbrand and reached finals of the TechCrunch Disrupt in 2016.

Based in Argentina, the project was already existing (2013) under another name (BitPagos) with a bitcoin payment platform (100K users), allowing people to store, send, receive bitcoins and use them on different merchant websites. And they proposed to their users (focus on Latin America where 65% of people remain unbanked) to provide them with financial loans (via bitcoins) when paying online on the partnered merchant websites. So they do not come from nowhere and team has already a strong experience in the crypto-world.

They have raised more than $6m so far (from Digital Currency Group, Pantera Capital, Fenbushi Capital — again, they are everywhere…). They also managed to get big funds (FBG Capital, Blocktower Capital) invest during pre-sale.

  • Sebastian​ ​Serrano: CEO: co-founded 2 companies before + MBA from University La Plata. No big achievement so far.
  • Antonio​ ​Ceraso: CTO: already worked with CEO in a previous company (devsAr) but no outstanding track-record neither.

Good point: they already have a large team (at least 12 people).
Bad point: no proof that they are rockstars and no partnership signed yet.

4 ICO details: 2.5/5

51% of the tokens available during ICO:

  • 42.5% maximum available during pre-sale. $31m has been invested during pre-sale, but we do not know how many tokens have been bought.
  • 8.5% available during the crowd-sale (maybe a bit more if all the pre-sale tokens have not been purchased already)

On one hand, given the amount raised during pre-sale, it shows that there is enthusiasm around the project (even though there was no discount for the participants…)

On the other hand, it means that there is not much left for the crowd-sale

Nothing is kept for the team or advisors, which is rare enough to be noted. Good sign but… weird/unusual!

Nothing mentioned about KYC or whitelist. It seems we are going to have a “flash” ICO (20 ETH individual cap). The fact that many people won’t be able to pariticipate can lead to frustration and people can try to buy tokens when it hits the exchanges.

5 Community & Communication: 3.5/5

6K+ members on slack (x3 in 3 weeks), many reviews done on the internet already (on Youtube, CrushCrypto, Picolo Research, etc.)

8K followers on Twitter.

Unfortunately, they have a Medium (https://medium.com/@rcn_news) to share knowledge and thoughts but it not very active…

6 Verdict

  • Short-term and long-term: negative

Sector with a large potential but Ripio does not propose strong added value and is not clear enough on how the project will be adopted by the end-users. The ICO will be available for only a very few people (not many tokens left). Team seems experienced since they have been working on Ripio for a while but no obvious track-record so far, nor any partnership.

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