Jcash and Jibrel Network Token Roll-out
Understanding how the Jibrel Network, Jcash and JNT work
As the token appears on exchanges across geographies, Jibrel Network Token (JNT) will be able to deliver its utility and the team will be able to undertake pilot programs. This post discusses the underlying mechanics of the network, the required set-up phase, and the on-boarding process of network participants.
Distributed Ledgers and “Tokens”
Distributed ledgers are used to track ownership of value. Tokens don’t actually get housed in a wallet, they exist as entries on a ledger (in this case, a distributed ledger or blockchain). When user: Alice, houses tokens in her Ethereum wallet, she actually just controls the private key that allows her to create a new entry on this ledger, reassigning ownership.
Tokenized Assets
Applying this view to tokenized traditional assets — e.g. Jcash, the first roll-out of currencies on Jibrel — we can immediately understand the role distributed ledgers will play in tracking asset ownership, as well as how smart contracts can be used to facilitate self-executing transactions.
It becomes clear that the ultimate goal of the network build-out should be to deliver a system in which stable off-chain value can be transacted with on-chain, while mitigating credit, volatility, fraud and compliance risks — i.e. allow for trust-less transaction of stable value.
Jibrel Overview
Besides infrastructure components such as the Jwallet and Jibrel Search, Jcash is the first service the Jibrel Network will provide. Jcash allows users to convert their volatile digital assets such as BTC / ETH into stable assets known as CryptoDepository Receipts. To do so, users:
- Define which stable tokens they would like to receive
- Send BTC / ETH along with JNT to the Jibrel DAO
- Receive stable tokens
- Redeem the token for the promised value at a future date
CryptoDepository Receipts (CryDRs)
CryptoDepository Receipts or CryDRs on the Jibrel Network are backed by smart contracts and economic theory, which force the ‘Guarantor’ to hold value off-chain, otherwise they would be absorbing credit risk and cannot transact profitably on the network.
Each CryDR represent a Smart Forward Contract between a liquidity provider and Network User. With the Jibrel DAO smart contracts governing the mechanisms that facilitate the user to redeem the CryDR for the underlying value at a future date, lawfully and compliantly.
To deliver this contract on-chain, six key components are required. Three provided by Jibrel Strategic Partners, and three provided by the Jibrel Network infrastructure / Jibrel DAO.
Strategic Partner Components
Pledged Value: This is underlying value provided by off-chain partners to back each CryDR contract. This is pledged using Jibrel Network Token (JNT).
Relevant Licenses: The strategic partner also provides the required licenses to facilitate the CryDR contract. Jibrel is also in the process of obtaining additional licenses required to operate independently.
Partner Compliance Rules: Each strategic partner can encode their own additional requirements to the CryDR contract (e.g. This contract can only be transacted by residents of a particular jurisdiction).
Jibrel DAO Components
Jibrel Network Token (JNT): The token that facilitates the operation of the network. It serves two key purposes, accessibility and proof-of-solvency. These are discussed in further detail in the dedicated JNT section below.
Smart Regulation: Real-world regulation codified into each CryDR contract. These differ from Partner Compliance Rules in that they are specific to the jurisdiction rather than the organization. These are the core rules behind each CryDR contract.
Data Oracle Feeds: Price feeds are required for each CryDR contract. These are programmed, cited and sourced by the Jibrel Network and are transparent to participants in advance of entry into each smart contract.
Jibrel Participants
This section outlines the set-up required for each participant to achieve their objectives on the Jibrel Network.
Strategic Partners
These are licensed financial entities that aim to use Jibrel technology to deliver cost efficiencies and generate an on-chain transactional profit.
Set-up Phase: Partners are on-boarded off-chain through a full KYC/AML screening process and back-to-back legal agreements to transact on Jibrel.
Process: Pledge a specific value off-chain and its equivalent value on-chain. Receive transactional profit at expiry of CryDR contract.
Network Users
These are individuals or other entities that aim Jibrel to hedge against volatility by obtaining stable tokens.
Set-up Phase: Users are on-boarded on-chain, with off-chain support to conduct full KYC/AML screening. Users are then allowed to obtain Jibrel Network Token (JNT) which will allow them to access CryptoDepository Receipts (CryDRs). The initial set-up phase was done through a token sale.
Process: Convert digital assets into stable CryDRs — provided by Strategic Partners, using JNT. This will be available through a dedicated Jcash website as well as within the Jwallet — the official wallet of Jibrel.
Jibrel DAO
This is the collection of Smart Contracts facilitating lawful and compliant transactions between Partners and Network Users on the Jibrel Network.
Set-up Phase: Technical development and build-out of smart contracts governing Jibrel. Gradual wind-down of any manual involvement and governance.
Process: Smart contracts oversee the Partner < > User transactions.
Jibrel
This is the collection of Smart Contracts facilitating lawful and compliant transactions between Partners and Network Users on the Jibrel.
Set-up Phase: Legal and compliance build-out of off-chain infrastructure governing the network.
Process: Facilitate the lawful and compliant on-boarding of partners and users as well as compliant transaction of assets on the network.
Process Flow Example
A full transaction on the Jibrel is outlined below. In the example, the Partner is creating a US$ 10,000 ‘crypto-bond’, with 30 day maturity, and charging a 10% premium for this ‘Forward Contract’. This contract is subsequently purchased by a user on the network, using BTC / ETH.
Note. Values and fees are completely illustrative and are used for simplicity of calculation rather than as an indication of how the network will operate.
Strategic Partner
To create this contract, the Partner pledges value in the form of JNT, by locking the JNT in a smart contract. An additional buffer is required to account for price movement in JNT, as well as the price of the asset the contract is denoted in (in this case, USD).
Network User
The user then chooses to enter into this contract for a US$ 1,000 premium (10%). The user is paying this premium to ensure they can redeem US$ 10,000 in 1 months time.
The user sends 1 BTC (valued at US$ 11,000 at the time) into the smart contract, and receives one US$ 10,000 CryptoDepository Receipt token.
Jibrel DAO
In the event that the underlying value of the asset deviates, or the JNT pledge becomes insufficient, the Partner is required to provide additional JNT.
During this period, while the Pledge value is insufficient, the user can exercise the contract at any time, receiving the full value back (including the premium).
This is overseen by a collection of smart contracts known as the Jibrel DAO.
Jibrel
This system requires technological and regulatory build-out / governance. This role is undertaken by the Jibrel Team, with the ambition of winding down their involvement in developing and managing the system over the medium to longer term.
Jcash Pilot Program & Commercial Roll-out
We recently announced that we will be running a pilot program with relevant governmental, regulatory and commercial bodies in the MENA region. This program will be the first pilot for the Jibrel DAO. During this pilot, Jibrel will act as the ‘Guarantor’. To start, Jibrel DAO will hold Proof of Solvency on-chain, as well as the underlying value off-chain.
Further details on the partnership and specifics of the pilot program will be released in the coming weeks.
Exchanges, Liquidity and Asset Portals
To implement this system, we need to create accessibility pools for Network Users, Partners and the Jibrel DAO. For this reason, JNT transfers will be unrestricted on February 1st, 2018–12PM GMT, as the network moves towards its first operational pilot.
Disclaimer
The build-out of the network is an iterative process. Previous architectures have been superseded by the latest developments in our Github repositories and it is likely that the architecture outlined in this post (and in our repositories) will continue to evolve and change over time.
Jibrel provides traditional financial assets such as currencies, commodities, debt instruments and securities, as standard ERC-20 tokens, on the Ethereum blockchain. Jibrel is a Jibrel AG initiative. Jibrel AG is registered in Zug, Switzerland, Qubist Labs Inc is a software development company based out of New York, US.
