Post by Neil_P2PBlog on Nov 22, 2017 15:16:46 GMT
An FCA sandboxed startup are creating a bond using an Ethereum smart contract (www.coindesk.com/who-needs-a-csd-nivaura-to-issue-first-regulated-bond-in-ethereum/).
As I understand it, this will automatically manage the loan conditions (and trigger a default) according to pre-agreed rules. They are still using a 3rd party to manage the debt in the case of a default.
Would something like this ever be practical for P2P Lending? My thoughts on how something like this could work:
1) Small businesses list their loan/ details on a decentralised platform. There would need to be some smart ways to detect fraud.
2) Investors discuss merits and share DD. Perhaps there could be some sort of monetary incentivisation (e.g. micro-tipping for upvotes).
3) Investors fund the best loans. There would probably have to be a Ethereum:GBP hedge built in to avoid volatility.
4) Smart contract manages repayments. Transfers ownership of underlying assets to investors if conditions not met.
Then in the case of default either
5a) 3rd party manages default for initial investors as agreed earlier
5b) marketplace for defaulted loans, where 3rd parties bid a % upfront on the entire loan and then manage the default themselves. Investors can vote to take the offer or hold out.
As I understand it, this will automatically manage the loan conditions (and trigger a default) according to pre-agreed rules. They are still using a 3rd party to manage the debt in the case of a default.
Would something like this ever be practical for P2P Lending? My thoughts on how something like this could work:
1) Small businesses list their loan/ details on a decentralised platform. There would need to be some smart ways to detect fraud.
2) Investors discuss merits and share DD. Perhaps there could be some sort of monetary incentivisation (e.g. micro-tipping for upvotes).
3) Investors fund the best loans. There would probably have to be a Ethereum:GBP hedge built in to avoid volatility.
4) Smart contract manages repayments. Transfers ownership of underlying assets to investors if conditions not met.
Then in the case of default either
5a) 3rd party manages default for initial investors as agreed earlier
5b) marketplace for defaulted loans, where 3rd parties bid a % upfront on the entire loan and then manage the default themselves. Investors can vote to take the offer or hold out.
