Ryver Protocol from 30,000 feet

Shawn Teow
Sep 6, 2018 · 5 min read

Ryver Protocol is meant to be the machine that builds banks, so this is an attempt to detail how the various parts of the machine and how they work together.

Layer 1: Avalanche Consensus

Layer 2: Smart contracts + settlements layer

Layer 3: Financial modules

The development of the first layer is currently underway and a technical paper will be out soon. But from a layman’s perspective (i.e. one that I can understand), Avalanche uses a Directed Acyclic Graph that asynchronously relays information (meaning not everyone has the information), but the chains that accrue the most information that has been verified, accrue in weight over time that goes toward voting on consensus.

The second layer is where settlements and smart contracts will sit. Broadly speaking, if “traditional” cryptocurrencies such as BTC or ETH were used, this settlement won’t be triggered. But as Ryver Protocol is built to accomodate digitised fiat as well, the settlement layer is required to dynamically net the balances and settle positions between users via blockchain and not the SWIFT system. This can take place in seconds instead of the usual 72 hours, due to the combination of digitising said fiat and using Avalanche.

Financial modules are the key basic building blocks that allow any entity to readily set themselves up as a bank. They are:

  1. Wallet
https://cdn-images-1.medium.com/max/1778/1*npfNfZDSv0VZpNM4X-dK8Q.png

The access point for every user. Not only does it secure funds, it is the gateway into the larger crypto ecosystem. It makes use of Zero-Knowledge Proof to obscure the balances held within the wallet.

2. Self-sovereign KYC.

Self-KYC is the first requirement, followed by independent third-party verification e.g. the utilities board verifying proof of address. The data is fully encrypted within the user’s app on its phone, accessible via biometrics, with a public identifier for the authenticating authority.

3. Trust Index

Each wallet would be able to both hold currency and create a gesture of “trust” to other wallets in the system. If wallet A trusted wallet B, it would mean that the owner of wallet B would have the ability to pull tokens or currency directly from wallet A at will. In other words, the owner of wallet B would have the ability to borrow money from the owner of wallet A. Individuals, and communities, would formally “trust” each other on a system like this (just as they do casually in the real world). That would give each other the ability to leverage each other’s capital. If people were willing to “trust” people at scale, we would end up creating a “Financial trust graph” rather than a “social graph.”

This web of consumer trust would allow people to directly borrow potentially large sums of money from each other in aggregate by borrowing small amounts of money from many different people i.e. Ryver Protocol Money Sharing. In a web like this, building formal financial trust with people you know, the incentive to repay loans is extremely high. If you don’t, everyone will know, and you will rapidly lose trust. If you do, then the trust you can gain from good behavior is extremely valuable.

Social trust and reputation are mutually reinforcing. The Trust Index reinforces this feedback loop by serving as a tangible indicator of their reputation. Given the importance of reputation in all social relationships and interactions, users will do all that they can to maintain it — thus social trust and reputation serve to discipline damaging behaviour. By doing so, it will help to strengthen the social element that drives interactions on a “trustless”
platform.

4. Money Sharing

By digitising Rotating Savings and Credit Associations (“ROSCAs”) and establishing them on the blockchain, we are able to offer reliable, secure and convenient credit to individuals and businesses alike.

How it works:

  1. A group of savers deposit register a Money Sharing pool together
  2. They check on each other’s Trust score and agree to each other
  3. They agree on the frequency, contribution and number of savers
  4. Their funds are locked into the Smart Contract, as well as their KYC and insurance terms.
  5. Upon starting, the Smart Contract automatically “pulls” funds from their Wallets at the pre-agreed time.
  6. Savers who borrow can make their withdrawals
  7. Those who do not borrow enjoy the interest from borrowers

Now savers have access to a ready avenue of borrowing that taps on the community without subjecting them to restrictive and larcenous loan terms.

5. Marketplace

https://cdn-images-1.medium.com/max/1778/1*0degRowQWM-28tV3Bh8zSg.png
Gateway to the rest of the World

The marketplace will be where users access the rest of the larger crypto community’s services. Anyone can write a smart contract that will be hosted in the marketplace and gain exposure + distribution to a global audience. The users themselves will also get benefits offered by services from the rest of the world.

This “marketplace” is not intended for vertical relationships between financial service providers and buyers alone. Importantly, it allows interactions between anyone who wants to handle money. For example, a developer could write a smart contract meant to automate payroll for anyone that needs to pay employees in multiple countries, list it on the marketplace and an employer that needs such a service could buy it from the developer.

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — —

Much of the decision to develop an entire ecosystem came about from an series of logical insights. Firstly, focusing on the layers alone is meaningless without providing the tools that will allow anyone to take advantage of them. Hence driving the decision to provide any entity with the infrastructure that they need to be their own bank and enjoy the benefits of the layers.

Secondly, for the protocol to scale, it requires nodes to easily come onboard, and this cannot be done if it was expensive to setup and maintain a node. By extending this logic, it is only natural for us to make these tools as user-friendly to end-users themselves to make it easier for nodes to onboard users.

Finally, we realised that many of these modules (such as KYC) may have been deserving of their own ICO in the past but they ultimately have no utility unless they mesh with other systems. By ensuring that these modules have immediate utility within the system itself, only then can we convince users of the value of coming onboard.

Ryver Protocol

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Shawn Teow

Written by

Deeply interested in tech and its potential to make the world a better, more connected place to live in. I write to share my love with all of you.

Ryver Protocol

Join the Ryver!

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