June is over and that means Q2 is over too! During the year’s second quarter RCN’s focus was set on completing several new features, updating its image across multiple platforms and defining a new Development Roadmap for the rest of 2019. Here are the latest news!
RCN Protocol v4.0 Diaspore
During Q2 the development team made the last adjustments to the protocol’s fourth version — codename “Diaspore” — and completed its first third-party audit by Nomic Labs, implementing the fixes suggested on their report. Now, Diaspore’s smart-contracts will be submitted for a second audit and a final iteration to further optimize their performance, after which the results of both reports will be published. When the audit process is complete, Diaspore will be deployed on mainnet and it will become the RCN Marketplace’s Engine.
The protocol’s latest version incorporates a modular structure that assigns each feature its own smart-contract. This improves the system’s performance and scalability potential and enables the integration of new functions, such as Installment Loans, Collateral-backed Loans and Multi-user Lending Pools.
Installment Loans
Among the main drivers behind Diaspore’s development was the idea to provide RCN borrowers with the ability to repay their loans in installments following an amortization schedule. This feature will enable debtors to return a loan’s interest and principal in multiple fixed payments — as established by the French loan amortization scheme — instead of having to pay the total owed amount at the final Due Date.
In addition to increased predictability Installment Loans will offer lenders earlier access to their returns, allowing them to lend bigger amounts for longer periods of time without compromising their liquidity preferences. In turn, this will likely enable borrowers to offer lower interest rates and still get funded on the Credit Marketplace.
The installments scheme — including the number of payments, the time between them and the amount to be paid — will be determined by each borrower when requesting the loan. This feature will be compatible with both Collateral-backed Loans and Multi-user Lending Pools.
Collateral-backed Loans
With the aim of increasing the Marketplace’s liquidity, the product team decided to add another strategy to their Loan Originator onboarding efforts. Enter Collateral-backed Loans, a feature that will enable any borrower to request a loan directly on the RCN Marketplace by offering stablecoins or ERC 20 tokens as collateral, and without needing to complete any KYC or scoring assessments.
By replacing a cosigner’s validation with collateral as the lender’s insurance against default, the credit demand on the platform will be able to expand worldwide in a more decentralized way and without increasing lending risks for creditors.
This process will be possible thanks to the use of margin calls, a tool widely implemented within the traditional financial system for managing asset purchases executed with borrowed funds. Margin calls are alerts that get triggered when the ratio between the offered collateral and the borrowed amount — also known as Loan To Value or LTV — falls below a certain predetermined level, called Liquidation Ratio. This may happen due to a decrease in the collateral’s value, an increase on the owed amount, or both.
Once the margin call is activated a portion of the offered collateral is automatically sold for RCN, which is then transferred to the lender to reduce the size of the debt and get the LTV back above the Liquidation Ratio. This procedure guarantees that the collateral will maintain its original value relative to the lent amount during the loan’s duration, which since it represents the lender’s insurance in case of default, is crucial to protect his or her best interest.
Collateral-backed Loans will be initially released with ETH, RCN, MANA and DAI (see below) as available collateralizable assets, although thanks to RCN’s integration with Uniswap (see below) any stablecoin or token listed on the platform could be eventually added to the feature.
As well as with Installment Loans, Collateral-backed Loans’ variables will be determined by each borrower when requesting the loan. This includes the borrowed amount and currency, the collateralized amount and currency and the Liquidation Ratio, among others.
As mentioned above, Collateral-backed Loans will be compatible with both Installment Loans and Multi-user Lending Pools.
Multi-user Lending Pools
Currently, the RCN Marketplace only allows borrower’s loan requests to be funded by one individual lender, which makes it harder for those aiming to borrow big amounts to successfully complete the operation. With this in mind, the development team is working on the third big innovation introduced by Diaspore’s smart-contracts: Multi-user Lending Pools, a feature that will allow big borrowers to receive funds from several lenders at once without having to divide their requested amount between multiple loans.
Multi-user Lending Pools — or MLPs for short — work similarly to some digital crowdfunding systems in which multiple users contribute a portion of the funds required for a single transaction, which does not get executed until the total amount has been fully raised.
Within the RCN Marketplace, lenders that contribute any given amount of tokens to an MLP loan will receive an equivalent amount of ERC20-V tokens as proof of payment. The ERC20-V — or simply “voucher” — tokens held by a lender represent the portion of the loan he or she has funded, and guarantee the right to receive an equal share of the principal and the interests paid in every installment.
For example, if a borrower requests an MLP loan for 100,000 RCN with a 60% APR and a repayment scheme with 12 monthly installments, there will be 5,000 RCN to be distributed between the lenders every month. If a lender has contributed 35,000 RCN — that is, 35% of the total borrowed amount — and therefore has 35,000 ERC20-V, he or she will receive 1,750 RCN every month — which represent 35% of the monthly installment.
As their name indicates ERC20-V tokens can be stored and sent to any ERC20-compatible wallet, allowing lenders to transfer their share of the loan — including the right to claim any future interests or principal payments — to other users.
When the Due Date arrives and the loan’s principal is fully repaid, lenders will be able to claim their share of it by exchanging it for their ERC20-V tokens, which will then be destroyed. In addition, lenders will be able to perform the same operation to withdraw from an MLP loan before it gets fully funded and executed.
As mentioned above, Multi-user Lending Pools will be compatible with both Installment Loans and Collateral-backed Loans.
DAI Integration
But RCN’s new features go well beyond the ones offered by Diaspore’s smart-contracts. With the aim of reducing exchange rate-related risks for creditors and increasing the number of currencies available for completing the lending process, RCN is partnering with Maker DAO to add the DAI stablecoin to its Credit Marketplace.
DAI is a decentralized USD-pegged stablecoin backed by crypto-collateral and fully controlled by its community. It is currently the fifth biggest stablecoin by both total market cap and trading volume and the most borrowed asset in the blockchain ecosystem.
While during the first stage of the integration process DAI will be listed exclusively as a lending currency, the stablecoin will eventually become available for collateralizing and possibly even borrowing.
As well as with the rest of the tokens and stablecoins listed on the Marketplace, DAI’s addition will be possible thanks to RCN’s integration with Uniswap (see below).
Elective KYC
Currently all RCN lenders must go through Civic’s KYC procedure before being able to fund any loans on the Marketplace. Being aware that some of them would rather use other platforms to complete the assessment or to have no KYC requirements at all, the product team is working to integrate different KYC service providers to the protocol and to enable KYC-free lending.
When these features get implemented lenders will be able to choose which personal information they are willing to provide in order to fund loans, or even decide they do not want to share any of it. In turn, Loan Originators will be able to determine which KYC requirements lenders will have to meet in order to fund their loans, an option that might get eventually available for Collateral-backed Loans’ borrowers.
This increased flexibility in KYC standards will allow a wide array of borrower types -from crypto-savvy retail users to large institutional Loan Originators- to get funded on the Marketplace while satisfying their different KYC standards.
Uniswap Listing
As mentioned above, the development team is working to list RCN on the automated token exchange protocol Uniswap, which will eventually allow a wide array of ERC 20 tokens to be used as lending currencies, borrowing currencies and collateral on the Marketplace.
With more than 50 listed token pairs and 15.7 million USD in total value locked, Uniswap stands out as one of the most promising Decentralized Exchanges (DEXs).
Besides the DAI stablecoin, the Uniswap integration will also provide liquidity for the already available currencies on the RCN Marketplace: ETH and MANA.
Price Feed Oracles’ Decentralization
With the aim of increasing the Oracles System’s resilience and better reflecting price fluctuations between the RCN token and the rest of the currencies — both fiat and crypto — involved in the Marketplace’s operations, the team is working to integrate more Oracle Providers to the protocol.
Similar to the scheme employed by Maker DAO to determine DAI’s price, the improved Oracles System will calculate the exchange rate between the used currencies as the median of the prices indicated by these Oracles Providers, effectively becoming more accurate, stable and robust as more of them join in.
Due to their open nature, some of these Providers might be members of the RCN community interested in maintaining its health and fostering its growth in exchange for a monetary incentive. An open call for new Oracle Providers will be published soon.
Decentralized Hosting
In a continuous effort to increase the Marketplaces’s decentralization, the development team is working to host its front-end elements on the InterPlanetary File System (IPFS).
IPFS is a protocol and network that allows peer-to-peer storing and sharing of information using a distributed file system in which multiple nodes hold and broadcast a portion of the overall data.
Given its increased level of decentralization, this alternative to the client–server model used in traditional web hosting represents and perfect match for blockchain projects such as RCN.
The IPFS version of the RCN’s Marketplace will be hosted on a separate URL and it will be accessible from any web browser.
RCN SDK
With the goal of easing the learning curve for any coder interested in using the protocol’s open-source features the team has been working on the RCN Software Developer Kit (SDK). Through a friendly interface and a set of simple JavaScript tools based in Marmo JS — the JS library of the Marmo SDK — and Web3 JS, the SDK will allow any developer to interact with price Oracles, borrow, lend and leverage the RCN’s smart contracts’ full potential using just a few lines of code.
The SDK, which is currently in alpha version, will also be a key resource for future integrations with both technological partners and Loan Originators.
RCN Identity Update
During Q2 the communication and design teams made an update to the project’s visual and written identity across multiple digital platforms, including changes in URLs, copy and graphic pieces.
Centered on the RCN.finance brand, the project’s new image was designed to reaffirm RCN’s commitment with both technological innovation and financial sophistication, the two defining principles behind its mission, vision and strategy for the years to come.
The first changes have already been implemented on the project’s new website (see below) and its Twitter, Facebook and Medium accounts. The full list of RCN’s digital platform’s new addresses can be found here.
RCN’s New Website
As part of the identity update process, RCN’s website was completely revamped to better reflect the current state of the project and its future milestones.
In addition to renewed aesthetics, the update introduces more specific information for and about RCN Creditors, Originators and the rest of the network’s stakeholders, including detailed diagrams of the protocol’s use cases and the loans’ properties and life cycle.
New changes and additional information will be implemented on the website during Q3 and Q4 2019.
RCN’s New Blog
To keep up with the other branding updates, the project’s Medium Blog received a full makeover to improve its looks and content availability. It now includes general information about RCN, access to its digital platforms, all the project’s updates since day one and analysis pieces about the DeFi ecosystem.
Money 20/20 Europe
As part of their Loan Originators onboarding efforts, during June the product team attended Money 20/20 Europe, the continent’s biggest fintech conference. Located in Amsterdam, the Netherlands, the event featured 3 days of keynotes and networking opportunities with some of the industry’s most important figures, of which RCN seized every second.
Next in Q3
During the next quarter, the product and development teams will continue to work with the goal of increasing the Marketplace’s liquidity and providing its users with the best tools to benefit from it.
All the mentioned features — and a couple more — will be released according to the New Development Roadmap during Q3, Q4 and Q1 2020.
Stay tuned for more exciting news to come in the following months!
Never miss one of RCN’s updates!
- Visit its Official Website & check the Credit Marketplace.
- Follow it on Twitter, Facebook & LinkedIn.
- Join its community on Telegram.
- Check its code on Github.
- Reach it at contact@rcn.finance & helpdesk@rcn.finance.
