Concept Update

The past week has been a fruitful one with many blockchain events attended and team meetings concluded.

Our product focus is now clearer after an intensive thought process and updates to our whitepaper will be released soon.

We have decided to continue building upon our KYC/AML and Credit Rating concept and move on to the product prototyping stage. Before that, we are engaging industry partners for talks and requirements gathering.

Key appointments for KYC/AML compliance and technology roles are also under way.

The financial services industry is a big area with problems and pain points which blockchains may be able to address. For CashDab to succeed, the approach to using blockchain optimally must be approached with the following ethos:

  1. To promote societal inclusivity of all walks of life.

  2. To help consumers and businesses save time and money.

  3. To reduce fraud and criminal activities.

  4. To make the global KYC/AML and Credit Rating process a fairer process.

Many people are unfairly penalised by draconian KYC/AML regulations and credit ratings, and we hope to be able to fix this issue by creating an active feedback community, as well as working with existing financial service providers.

CashDab cannot solve all of the financial services world’s problems, but we can take small steps towards fixing them one at a time. Throughout the process of achieving CashDab’s ultimate goal, we will ensure inclusiveness and consider all feedbacks from anyone who may be interested to help improve our dapp. We may make concept and design errors along the way, and we seek the communities patience and feedback.

The decision to build upon the KYC and AML product first is because it is an existing and pertinent paint point for consumers and financial institutions, and we believe post completion of our KYC and AML product, other related financial services can be spun off.

KYC, AML Credit Rating processes came after banks were created.

We believe that 21st century banking requires the KYC, AML and Credit Rating products to be made first, then later on augment traditional financial services.

 

This is to promote a fair and inclusive KYC and AML process and remove unfair customer penalisations.

We believe the concept of KYC, AML and Credit Ratings is set for big changes, and it could that at some point in the future, that these concepts may cease to exist and we hope to be part of the technology which makes that transition, but that is a digressive topic for another post.

See link to our previous of the concept flowchart.

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Whitepaper Working Draft

We are pleased to release CashDab’s first whitepaper working draft. Please view it in the following link: CashDab_v1.0 .

As it is a working draft, it will be subject to changes.

A Revolutionary Global Financial Passport

Can you imagine being able to quickly apply for financing when you cross country borders while not being a resident in that country?

Currently, it is very hard, if not impossible to be able to apply for credit lines in a country which is not your country of domicile, and here are two real life examples:

  1. Dennis is a Singaporean who was posted to work in the United States on an indefinite contract basis. When he tried to lease a car personally, his application was rejected as he did not have a credit history in the US. In the end, his employer had to help him arrange it.
  2. Henry is a Singaporean who travelled to the United Kingdom with his daughter who was accepted to a university there. When he tried to open a deposit account together with his daughter, the application was rejected outright. In the end, the university which accepted his daughter had to apply for the bank account on behalf of them.

The above two examples show how difficult and slow it is for consumers to apply for credit lines outside of their domicile counties for legitimate reasons. There are many examples of how difficult it is to get financing outside of your country of domicile due to basic distrust of non-residents and lack of a trusted source of verification for a global travellers’ credit history, and this is creating a huge financial roadblock and opportunity cost for global consumers and businesses.

CashDab’s blockchain based credit rating and KYC decentralised application solves this problem by creating a “Global Financial Passport”for everyone, which can be accessed anywhere as it will be stored in the indelible and highly secure blockchain.

 

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Social media applications allowed your personal self to be uploaded to the internet, CashDab’s blockchain technology will change the way global financing is done by allow your financial self to be uploaded to the internet, so it follows you everywhere you go.

CashDab will therefore be the global blockchain powered intermediary which decentralises the credit rating and KYC role of existing financial institutions. No longer will you or your  business be restricted by your country of domicile or lack of credit history amongst different financial institutions.

 

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CashDab’s credit rating and KYC on-boarding process for new users and users with existing credit history in other financial institutions will be covered in the upcoming white paper.

This blog post is part of a series of articles leading up to CashDab’s white paper.

Incentivising Borrowers

CashDab introduces true game-changing borderless, seamless and cost effective financing.

How will CashDab encourage new users to take up credit lines with our application?

We highlight some of the borrower products to be implemented:

Basic features:

Each borrower will be able to set their loan amount plus interest rate manually or have automated guidance rates based on loan type, location, occupation, income and initial credit ratings. If they want access to advanced products, different levels of account verification will unlock more features such as higher margin amounts, specific financing which requires more than basic verifications etc.

Loan products initially available will be micro, personal, home renovations, education, invoice and working capital loans. Car financing, mortgages and larger value loans will follow upon funding requirements.

CashDab’s innovative credit rating and KYC tokenisation:

Every successful repayment will be issued a blockchain token (“DAC’), which will be used as a borrower incentivise to reward them by improving their own blockchain credit rating. This is used for counter-party credit risk assessment by lenders, eg, the more DAB tokens a borrower owns, the better credit rating, of which there will be various uses covered below.

More tokens will allow higher loan values and higher capital lenders will be matched, eg. SME & corporate loan, invoice financing etc. As this personal credit rating token is stored on the immutable internet blockchain, it can used to prove their personal financial track record across country borders, if a user migrates and needs to provide personal financial data for car leasing or mortgage application.

This was not previously possible due to centralised credit information silos and distrust amongst segregated intermediaries. With CashDab’s decentralised global intermediary, credit ratings and KYC for each borrower will be globalised via significantly less intermediaries, which will result in cost and time savings.

DAC tokens can traded between users for the purpose of increasing security collateral for improving their credit rating, with the trade off of decreased credit rating.

Tokens themselves are mined so they have intrinsic value for borrowers as well lenders security collateral. We will advocate to financial institutions to recognise DAC tokens as a robust and secure way of assessing borrowers as part of CashDab’s decentralised global intermediary, credit ratings and KYC push.

User anonymity:

Lenders and borrowers remain anonymous to each other as they as communicate entirely in CashDab without race, location, gender or historical bias. What they will see are the necessary information to make an unbiased and guided investment decision. The entire loan processing speed will be increased  significantly compared to existing P2P loan funding as CashDab provides real time guidance and high data accuracy due to our blockchain architecture.

This is especially crucial in emerging markets as banking access is limited, but economic growth rates are typically many times higher then developed markets.

If required, each user’s credit rating and KYC data stored in CashDab can be revealed according to each user’s discretion, bearing in mind that release of sensitive personal data is discouraged as CashDab is meant to work seamless and anonymously.

DAC token usage:

Improving credit rating: CashDab’s decentralised credit rating system is based on the amount of DAC tokens a borrower has, whether it was earned from loan repayments, or purchase of them.

Payment of future loans: DAC tokens can be used for future loan repayments

Secured loan collateral: DAC tokens can be used as security to access higher gearing loans

Lender funding: DAC tokens can be used for funding loans, if the borrower wishes to borrow in DAC.

This blog post is part of a series of articles leading up to CashDab’s white paper.

Incentivising Lenders

How will CashDab incentivise investors/lenders to use our platform? There are two identified concerns which investors may raise before putting funds into our platform, and they are:

 

1. Investors’ fund deposit protection or insurance.

Investors’ funds are stored in CashDab’s blockchain in ERC20 compliant digital token form which are highly secure and immutable. CashDab does not loan its own proprietary balance sheet funds out, unlike traditional banks which normally lend within their capital adequacy ratios.

CashDab does not provide for insurance protection of investors’ funds at the moment, but we do intend to consider providing loan loss reserves in future, subject to achieving monetary funding milestones. Traditional banks do not provide compensations in periods of business cycle stress if there any loan defaults.

Investors will have full transparency throughout the entire funding process. We intend to keep the user interface as simple and straightforward as possible with clearly stated loan characteristics, borrower credit ratings,  loan industry and purpose of loans, and also implement an automated chatbot to help new users. Via our tiered account verification and product access, innovative credit rating process and our continuous efforts to keep informed of the latest industry updates, investors will find the risk reward balance attractive.

We work together with investors hand in hand to ensure they are informed about our products, as well as educating them about the risk and rewards of diversifying their investment capital through CashDab, and informing them of our loan portfolio automation service.

 

2. How much platform transparency will investors have? For example, will all investors get the optimal return rate for loans while having borrowers with the best credit ratings?

CashDab’s software adopts various economic algorithms, which includes some game theory such as the Nash equilibrium and decision analysis theories.  All investors wish to lend at the highest interest rates to borrowers with the best possible credit ratings, so this will be the expected and default choice, and our internal loan matching algorithm ensures a level playing field for all users by considering lenders’ risk aversion levels, amongst other factors.

CashDab will not discredit borrowers unnecessarily to increase their interest rates, instead we will fully disclose all previous borrower activities so that investors will know that they are getting fair and optimised deals.

CashDab’s trustless blockchain architecture will allow investors to lend anonymously and securely, without any kind of discrimination or ostracism. Various loan characteristics, such as borrower credit standing, industry and purpose of loan will all be disclosed. Further details will be published in our upcoming white paper.

This blog post is part of a series of articles leading up to CashDab’s white paper.

The case for an anonymous marketplace lender

The concept of loans have existed for thousands of years, and typically lenders would know who the borrower is, and on that basis amongst others, issue the loans. So why is there a case for anonymous loans, and how will it be implemented?

 

Existing loans:

Finance institutions which issue loans require as much Know Your Customer (“KYC”) information as possible before allowing a borrower to have a credit line with them, and because existing finance firms’ customer databases are not linked to each other, each firm will do their own verification and KYC checks and store them in centralised information silos.

Pros: Traditional methods of KYC have existed for a long time already and so far have proven to be quite reliable.

Cons: Information silos and outdated KYC process. Banks or credit firms do not share KYC information as they treat such information as classified and undisclosed for customer privacy sake. I argue that existing KYC checking processes are outdated and CashDab intends to implement new features which will be covered in the next section below.

 

Anonymous loans:

CashDab enables anonymous loans by having its own internal credit rating token issuance system, an innovative social media driven KYC checking process, and a tiered account verification and product feature process. Lenders and borrowers are connected simply without having to do time consuming understanding and external verification of counter-parties. Lenders need not worry about the loss of deposit insurance protection unlike non-blockchain P2P lenders as all funds and transaction informations are stored in the incorruptible blockchain. The funding mechanism will be discussed in detail in the upcoming whitepaper.

CashDab will create a decentralised credit rating and KYC system which uses a combination of blockchain as well as linking each user account’s social media information to perform KYC and credit ratings, eg. checking of each borrower’s social media accounts such Facebook, Twitter, Instagram, LinkedIn etc on top of typical personal or corporate income statements. Social media is increasingly becoming a part of most people’s lives so social media streams of borrowers are increasingly becoming relevant as part of the KYC process. It will be part of the tiered account verification process to submit the borrower’s social media account handles, eg. the more income and social media information you provide, the more a user can borrow and have his/her account enabled for higher margins.

For every successful loan repayment, a small percentage will be issued to the borrower as an internal blockchain credit rating token, so the more tokens a borrower has, the better its credit rating. Any loan repayment delays or defaults will have a negative effect on the credit rating token values. The credit rating token mechanism will be discussed in detail in the upcoming whitepaper.

The borrower’s credit rating tokens are stored on CashDab’s blockchain, and will have the option to have limited public accessibility. This is so that any CashDab user will have his or her own virtual credit rating for personal finance history reference and financial status verification etc. For example, if a CashDab user migrates to another country for work purpose, and when say purchasing or leasing of a vehicle, the user can produce his CashDab credit rating and loan history, etc., as part of his financial status verification. CashDab will effectively decentralise credit ratings and at the same time make it universal by itself being a borderless entity. This solves the problem for people when they cross country borders and their income and financial statements aren’t applicable. We intend to work with existing financial institutions to roll this out globally.

This in effect shows that anonymous loans will work as CashDab removes the need for separate financial intermediaries by virtue of having all the necessary information required to complete a loan process stored on the immutable CashDab blockchain, thus its goal of streamlining global financing, reducing intermediary costs and addressing cybersecurity concerns all at once.

This blog post is part of a series of articles leading up to CashDab’s white paper.

White paper snippet #1

“CashDab is the world’s anonymous marketplace lender”

Currently, loans are provided through each countries’ banks and finance firms, and are therefore subject to each jurisdictions’ regulations, fees, commissions, and inherent centralised technical challenges.

As commercial banks face increasing regulations and capital adequacy requirements, consumers and corporations find it increasingly difficult to get reasonable financing returns as deposit rates are being flattened to zero and in many places facing negative interest rates. Conversely, in high inflation third world nations, personal loan rates are typically in the double digits.

CashDab is the blueprint for a decentralised application allows anyone to anonymously access a global marketplace lender network and match themselves with borrowers or lenders willing to fund their desired rate of return. CashDab will bypass and disrupt existing cumbersome and costly middlemen entities, and allow cryptographically secure access to competitive loans anywhere and anytime, while adhering to the highest security standards in the blockchain ecosystem.

This was previously not possible until the advent of blockchain distributed ledgers, and effectively means borderless  global financing without the possibility of network downtime, censorship or third party interference. Electronic loans currently form an increasing amount of loan transactions, but therein lies the inherent risk of data loss or manipulation from hacking. This is where blockchain and  immutable cryptocurrencies come in to provide the security.

Take up rates for loans matched through CashDab’s platform will grow exponentially as a result of providing a global decentralised trustless financing service, especially in countries which are underbanked  with high prevailing interest rates.

If CashDab scales enough to have a wide user and transaction base, we see it taking away traditional banks interest income.

The First Post

On 5 July 2017, the conceptualisation of a decentralised loan marketplace based on the trustless architecture of blockchain was formed.

We felt that blockchain was possibly an ideal platform to theorise, conceptualise and put into action a working decentralised finance platform which will anonymously connect lenders and borrowers around the world in a seamless and secure manner.

Beyond the basic concept, supporting products strengthen the business model to make it a real world usable dapp (“Decentralised App”). For it to achieve its ultimate goal, decentralisation of every main function is pertinent, from lender and borrower discovery/matching, borrower credit rating, to loans portfolio management. Without the supporting products, the business model would be incomplete and practically unusable.

CashDab’s draft white paper is available for viewing soon.