This is a transcript from DataDash: Sentinel Chain — Revolutionizing finance for the unbanked
What’s going on everyone? My name is Nicolas Merton here at DataDash and today is February 28th of 2018.
Well today I want to spend some time to talk about a project in the blockchain space that I’ve not only grown more interested in as I’ve gotten to look further into the project but I’ve gotten more and more eager to talk about here on the DataDash channel.
Now as many of you might know in the space of blockchain there’s always a lot of talk and noise that really makes it hard to find projects that are bringing lost lasting innovation, opportunity and also the possibility to leave a lasting impact in some way, shape or form and Sentinel Chain is no exception in my eyes. And a short and sweet to the point summary guys — Sentinel Chain is aiming to bring banking and financing to the unbanked and they’re doing this through a concept where we can use livestock such as cattle as collateral for loans to these people who are living in the unbanked world and they’re doing this through the use of blockchain, RFID tags and so much really cool tech that I want to dive into.
Before we dive into the review guys I want to be completely transparent with you guys. I have not received any payment for this review I’m just doing it because I love the project. I currently don’t hold or invest in Sentinel Chain because it’s currently going through its ICO phase so I will be definitely getting into it once it gets on exchange and last but not least I want to be clear and transparent with you guys this is not financial advice this is just simply my opinion. So you guys got to do your own research and I’ll have all the resources you need down in the description as well as a website linked to the Sentinel chain project where you can find any additional resources that you might need. Alright so that was a mouthful let’s go ahead and dive into it and talk about Sentinel Chain.
What issue is Sentinel Chain addressing?
So what is the issue that Sentinel chain is addressing? It’s really the core foundation of what Sentinel chain is trying to achieve and that is trying to help over 570 million farmers across the world. Well, what’s the big issue with these farmers across the world there’s a lot of individuals who depend on agriculture for their income. But what’s the real roadblock that gets in the way of them continuing to expand and hopefully escape poverty which many of them are stuck in right now. Well it’s the fact that they don’t have access to traditional financial capital or financial services. Traditional credit systems will not lend out to these smaller scale farmers because the fact that they either don’t have a credit score or that they don’t have anything to use as collateral for loans.
I know a lot of people usually would usually just say, “Oh, the banks are just evil.” Well, you all know I don’t like banks that much but there are actual economic reasons why banks usually don’t take the risk. There’s a lot of issues that come in the way of helping these base agriculture farmers actually expand out and expand their financial ambitions. So we’re going to learn about some of those issues and how Sentinel Chain is trying to fix them.
Why can’t farmers get access to capital?
So why can’t farmers get access to capital generally. Well, first and foremost most farmers don’t own assets to utilize as collateral. When we are here in the Western world in a well-established country that’s developed and our incomes are much higher and most of us don’t depend on agriculture…we own a lot of assets. We own homes, we own things that are liabilities that could almost be seen as assets like cars and things that we can use as a form of collateral when we’re borrowing money and because of that we’re in a much more comfortable system, but for farmers they don’t really have much.. the only thing they really have is their livestock as we can see in the photo here but it’s hard to track the status of livestock and all of the important data points that come with livestock. So for example, ownership.. who owns this sheep or who owns this cow over here.. we have no way of really telling it and it’s been a serious issue for farmers and who are dependent on base agriculture and their livestock to move forward with their way of living and getting money and financing.
Along with that as well is identity. How do we identify a certain cow from another? There’s a really cool interesting story here for example — in Myanmar, there were farmers that were abusing an insurance policy. Insurance policies in regard to getting one insurance policy to cover a cow and when one of their 10 cows would die they would use the insurance policy on that cow because no one could really tell which cow is which, so because of that it’s a really big issue right now in regards to getting consistent transparency and capital to farmers. And last but not least is the quantity. How much cattle does a certain farmer own in total so we can see how much he can utilize as collateral etc.
There’s all these different data points that really get in the way of transparency which is the issue in regards to microfinancing. So because of this the only asset that these farmers own across the world that these 500 million farmers own is now considered as something known as ‘dead capital’ meaning that they really can’t capitalize on it. They can’t get financing through this livestock that they own because it’s just not in a transparent system where all of the different counterparties can have a sense of trust and funnel money through to finance to the ambitions of these farmers.
What does Sentinel Chain offer?
So, what does Sentinel Chain offer in total is a very simple brief kind of description. The Sentinel Chain is trying to offer a B2B marketplace where people can use livestock as collateral. We can fix this issue in general so now that they can use the one asset they own to finally get financing they need to escape poverty and getting to a much better position financially. This is done through a wide variety of things such as the Sentinel Chain on consortium blockchain which is a member based system that has self-governance or they’ll be able to decide decisions and also make transactions over the network and also connect cross chain with CrossPay blockchain — so we’re going to learn about what CrossPay blockchains are as we go throughout the video. It’s a really interesting system how Sentinel Chain is trying to build an ecosystem around it to do different purposes on different blockchains.
How does Sentinel Chain work?
So how Sentinel Chain work first and foremost… well before we get into the chain structure and all the different cross communication of blockchains, I really want to emphasize that Sentinel Chain uses a lot of interesting things — not only is it obviously using blockchain technology to store the data and information on these different chains but a lot of that as well it’s using tamper-proof RFID technology to track the cattle and other livestock as well as mobile software for people in the unbanked world who need simple easy infrastructure based on mobile phones rather than you know.. a huge banking outlet that you might have down the road or a bank teller to talk to. You need something that’s as simple as a mobile payment solution to get access to this financial capital and that’s exactly what Sentinel Chain is doing. So for all the resources you guys need on CrossPay which is the mobile application, feel free to scroll down I’ll have the resources down below as well as the tamper proof RFID tags — really interesting video to see how it works.
How does Sentinel Chain operate?
So let’s go ahead and focus on the structure of the ecosystem for the Sentinel Chain — how does Sentinel Chain operate? Well there’s really three major components in regards to how information is stored within the ecosystem.
Now first and foremost you have on the far-left CrossPay blockchains. Now there’s not one singular CrossPay blockchain, there are multiple and we’re going to learn the purposes of these blockchains as we go through the video. So with each respective country that Sentinel Chain really launches in and really starts to build connections and there’s going to be a CrossPay blockchain that is respected towards each country’s border. So for example, if we have Bangladesh as a country or Myanmar which are the two first targets that Sentinel chain is objectively going for. They each have their respective CrossPay blockchain. These blockchains are private and their tied towards the CrossPay app where users can privately access their information and store their information in regards to their loans and different financial services they’re taking out as well as the other information that could be stored on the blockchain. Along with it as well each local blockchain has their own LCT token or local CrossPay token.
Now these local CrossPay tokens are pegged at a one-to-one ratio at the respected currency for that given country. So let’s say for example we’re on the CrossPay blockchain for Bangladesh — we’re going to have the LCT tokens on that blockchain that are pegged at a one-to-one ratio with the Bangladesh currency.
This is where a lot of the users are going to be interacting with the datasets — mostly the farmers in this case. Alot of that as well we have a cross-chain communication with this Sentinel blockchain.. this is the man chain where the tokens will reside. So what is the sentinel blockchain objectively doing? Well, it serves as a consortium blockchain. This is where not only a lot of the governance policies and the membership of the Sentinel blockchain happen but along with that as well it’s where a lot of the services can be accessed in regards to it. So if someone wants to issue out loans — for example crowdfunding, all these different features they have to do it on the Sentinel main chain and this is where the use case comes for the Sentinel token and regards to the Sentinel main chain.
So we’ve got the CrossPay blockchain, the Sentinel blockchain and last but not least another cross chain communication happens between VeChain. The VeChain blockchain as many of you might know had recently gone out and done a partnership with the Sentinel blockchain. So how is sentinel chain utilizing VeChain — what’s the purpose of Vechain in this whole play? Well, VeChain serves as a wonderful purpose of tracking different types of items and services through supply chain management techniques and in the case of VeChain and what it’s going to be doing is tracking the information of the livestock in this case. So for the cattle that we might have for example farmers or the sheep — the information tied towards that livestock in its current status its age weight and health and other different factors that need to be more public can be stored on the VeChain blockchain. What’s nice about this is that all the information is transparent it’s out there and it’s immutable. However, at the same time the privacy of the farmer who owns that livestock is not broken — it’s guaranteed in the system and all that is stored on the CrossPay blockchain. Because of that it’s a much more secure environment and people can not only have their respective privacy but also information can be transparent. So this is why we have an ecosystem rather than one singular blockchain — this is the really the big thought process that Roy the founder of the project who I had the fortunate opportunity of meeting inside Singapore really expressed to me in the sense of having a different whole ecosystem rather than just one blockchain. Because different blockchains can do different purposes better… and so long as through the method of atomic swaps these blockchains can communicate — things can work very smoothly and they can operate soundly.
The “Chain of Incentives”
So this is something I also want to talk about as well something that Roy calls the chain of incentives and I wish there was more blockchain projects out there talking about this.. because I have been looking for a term for this for a while but it’s been a very big issue I find that most ICOs will go out and launch and they don’t even think about this as being an issue. So for many blockchain projects out there there’s a big issue that when you’re launching a project for example and you’ve got this great idea of how you can make something easier with blockchain technology for a certain party. Many projects don’t think about the fact that they need to please more than one party — they might need to please 2 or 3 people or maybe they’re pleasing 2 different parties but there’s a third party that’s not involved in receiving any benefit from this new technology and because of that adoption will subside — it will never come into fruition.
“…something that Roy calls the “chain of incentives” and I wish there was more blockchain projects out there talking about this”
Well, in regards to the project for Sentinel Chain there is a “chain of incentives” everywhere we look with all of the parties involved and trust me there’s a lot of parties we’re going to talk about here that are involved in the process of helping micro-financing become reality for people who are living in base agriculture. So first and foremost we have three major parties, we have right here on the far left side (see screenshot) the peer-to-peer lending pools — people who are doing micro-financing in a pool of lending usually smaller lenders. Then we also have the banking system right here. Some banks are solely built just to do micro-financing for small agricultural farmers. And then we also have governments and governmental bodies that can help in the sense of adoption for this technology as well as supplying the regulatory bodies for. Along with that we have the insurance providers — the insurance providers who provide policies for the agriculture farmers — remember we were talking about the example in Myanmar earlier where there was some abuse in the system. Well they actually don’t even do business in Myanmar because there’s such a lack of transparency and they’re going to have a great incentive to want to partake in this ecosystem. And last but not least the farmers — the farmers themselves that need to get access to capital.
If we take a look at the banks and the peer to peer lending pools as well as government’s, there’s a financial incentive because there are entire companies out there who want to lend out to these markets any kind of lending institution tries to find a market to get into and a lot of people see micro financing for farmers as an opportunity and right now there just isn’t an easy gateway to get there and have a sense of transparency along the way so they’re going to want to participate in this system not to mention governments as well for these respective countries like Myanmar and Bangladesh depend heavily on agriculture and they want to do as much as they can to support financing for these farmers.
Okay now that we have all our different parties here there’s a lot of parties to please — why is that everyone’s going to want to co-operate in the system? Well let’s begin. It’s going to become more and more apparent as we go through the video let’s go ahead and take it one step at a time now. If we take a look at the banks and the peer-to-peer lending pools as well as governments. If we take a look at the financial side in the bank and the peer-to-peer lending pools — there’s a financial incentive because there are entire companies out there who want to lend out to these markets. Any kind of lending institution tries to find a market to get into. And a lot of people see micro-financing for farmers as an opportunity and right now there just isn’t an easy gateway to get there and have a sense of transparency along the way. So they’re going to want to participate in this system. Not to mention governments as well for these respective countries like Myanmar and Bangladesh depend heavily on agriculture and they want to do as much as they can to support financing for these farmers.
So how is the system going to provide more transparency — we’ll get to that in just a sec. Next up is the insurance providers — in order to guarantee transparency these insurance providers want to sell policies but at the same time know that the livestock is theirs. So they need to have a system to track the livestock. Therefore the system that Sentinel Chain is offering will provide as a perfect solution for them. And along with that as well the farmers themselves are looking for open opportunities. They’re looking for ways to get micro-financing that they traditionally couldn’t get. Well, what’s really nice is that within this system not only can they use Sentinel technology but transparency actually opens up more opportunities for finance. So what I mean by this — this is where the real “chain of incentives” come in. This is a really cool system. When one of these farmers are transparent about their livestock — it instantly opens up an opportunity to receive capital. Remember that original example in Myanmar where the farmer was lying to the insurance provider and saying “Oh I’ve only got one cow instead of the ten that I really have in the background and I want to buy one insurance policy”. Well, what’s the farmer going to do now is he’s actually not only going to register his ten cattle on the blockchain but also buy insurance policies for all those ten. The reason he’s going to do this because there’s such an economic incentive for him to do so. The cost of getting insurance is fractional compared to the open abundance of opportunity he now has for liquidity through lending due to the fact that he can now track his cattle.. and the greatest thing about it is that the insurance companies are going to sign off on the blockchain that they actually own those livestock — those actual cows. So because of that it opens up more opportunity for the farmers; it opens up transparency for the insurance companies to know that there’s an economic incentive for them to share as much cattle and their livestock as they own and the lenders are more than happy to make loans now because they can see, “Oh, there’s a traceable system for it and look the insurance companies that signed off on it.” They’ve said and verified that they have insurance policies for these cattle and they believe that the farmer actually has it. So this is the really intrinsic system that will lead to very fast; very mass scale adoption in regards to Sentinel Chain. Really exciting stuff guys in my personal opinion.
Partnerships & Developments
So next up is partnerships and developments, I know this is a big thing for everyone you know — where is the project going in regards to who it’s working with and who’s funding it. Well, first and foremost is really two big funding firms two big funding firms — a big VC firm in China as well as in Singapore, Fenbushi Capital which is based in China and had Vitalik originally as one of the members on the team and iGlobe Partners which is based in Singapore where Sentinel Chain is based as well. So we have some really good venture capital funds investing in this project seeing potential in it as well as VeChain coming on board and showing support for it.
“VeChain’s collaboration with Sentinel Chain represents a new chapter in inclusive finance. Our solutions will build positive social outcomes in ASEAN — by using Blockchain & IoT to lay sound foundational digital infrastructure which will support new data-centric business models.”
Sunny Lu, CEO, VeChain
I think the quote says it for itself — you ca read through it yourself but again guys — the partnership with VeChain is a very big deal.. not just in the sense of hype but also as a founding part of the ecosystem for Sentinel Chain.
Team & Advisors
So next up is the team and advisors. This is a very important part to look at as always you guys know that I’m very critical on teams as well as advisors.. and there’s a lot of good things to look forward to so first and foremost, Roy the guy I got to meet — he was an absolute pleasure to talk to, he’s a really kind guy and a guy who had traditionally worked in the banking industry for quite some time but wanted to make a change and work for the greater good of humanity and Roy has a previous history not only of running InfoCorp which is the parent company overseeing a lot of the operations with sentinel chain but he’s also worked in building payment solutions for millions of users in Asian markets. So he’s got a pretty tailored background in that space in regards to helping people and building infrastructure for micro-financing.
Along that as well Chia is here as well, I hope I’m pronouncing his name right — also worked under the company that Roy worked in as well. And Zann as well is a really interesting candidate.. I’m glad I found out about her information on her LinkedIn page because she originally worked in building and launching in the company and serving as CEO of this company in launching the first ever Bitcoin ATM in Singapore — which I think technically I think they said in the article is the first in Asian markets. So that’s really exciting stuff guys to see someone who has been in the traditional space of infrastructure working on this team to really get micro-financing out to an area and on platforms that really haven’t launched yet. So, very important stuff. And then down here as well on the advisory board, I can’t say it enough guys — we have a lot of people who have worked not only for Fenbushi Capital, for BlockAsset, a lot of VC funds as well as a lot of other different funding organizations that help foster blockchain innovation.
So a lot of great and not only people on the team but also people on the advisory board as well.
So the Roadmap here, I don’t want to dive through all the Roadmap here. I do want to say a few things and highlight a few parts. First and foremost, you have to understand if you are going to invest in this project guys or see the potential in it, it’s not going to happen overnight. Like a lot of blockchain projects that set really early the goals and then they keep pushing it off.. they’re very transparent about it guys. This is not going to see mainstream adoption really until the later part of 2018 or into the early part of 2019. However, there is some good news. They’re not only going through the ICO right now. The Sentinel chain token will launch in Q2 of 2018 and CrossPay will go live in stage 5 in Q4 of 2018. So they’ll start to get the infrastructure out there. They’re starting to already do beta testing over these next few months. In regards to Sentinel Chain in getting the whole system going — building the governance body and really making it so these different blockchains can communicate and the infrastructure is ready to go when it launches on large scale.
I’d like to hear what you all think about Sentinel guys. There’s a lot of interesting developments going on with this one. It’s not a lot of talk — they’ve actually landed a lot of partnerships in Myanmar, in Bangladesh — their first two targets and they’re looking to expand rapidly once they get testing done. So it’s good to see a project that’s not just talking but that’s actually getting out there getting something done and doing something for the greater good guys. Again, I’ve had a wonderful time looking into the project. If you have any questions definitely reach out towards the Sentinel community — I bet they’d be more than happy to answer any questions.
Transcript by Darryl Lo
Edited by Anne Riana