October 9, 2018 (2 weeks ago)

Cooperation Between Debitum Network and MakerDAO

We want to announce about MakerDAO and Debitum Network ongoing cooperation to integrate their systems and utilize the power of Dai Stablecoin to maximize profits for investors on Debitum lending platform and hedge against volatility that most cryptocurrencies undergo on a regular basis. Currently, Debitum Network is testing API integration capabilities between the respective systems.

As a result of the integration, investors will be able to enjoy the benefits:

1. Earn interest on asset-based loans and support financing needs of SMEs around the world.

2. To profit from increased crypto price during the loan period.

3. Minimize the risk of decreasing crypto value as SME loans are asset-based and will likely have smaller downward volatility than that of crypto.

Why DAI and how it ensures stability?

Dai is a cryptocurrency that is price stabilized against the value of the U.S. Dollar. DAI is created by the Dai Stablecoin System, a decentralized platform that runs on the Ethereum blockchain.

For there to be a modern financial system on the blockchain, there needs to be a stable medium of exchange, a truly stable currency. Dai achieves stability and hedges against volatility via an open smart contract platform that allows anyone in the world to lock up their assets as collateral and issue Dai against them.

Unlike other stablecoins, there is no need to blindly trust a third party. When users want to retrieve their collateral, they simply return the Dai they issued plus a fee based on how long it was outstanding. True to the spirit of the blockchain, no one can alter these core mechanics of Dai, making it a safe and predictable form of money.

What will the process be like after integration?

We want to show you a detailed process how two integrated systems look like in practice. Here is a step by step guide:

1. An investor deposits crypto Ethereum (we are working with MakerDAO to have the same functionality with DEB tokens) on Debitum Network platform and Debitum Network sends it to MakerDAO, where it is “frozen” as a collateral.

2.1 67% of ETH collateral is used to create emission in an equivalent amount of Dai tokens (possibly less for DEB tokens).

2.2 Issued Dai is exchanged to ETH (on MakerDAO decentralized exchange – Oasis).

2.3 ETH is exchanged to EUR on an exchange supporting fiat pairs (most probably on an independent crypto to fiat exchange).

3.1 The amount of fiat is updated for an investor in his balance (on Debitum Network platform) and he can choose where to invest it on Debitum Network.

3.2 The crypto investor chooses loans to invest in and his fiat is transferred to small businesses.

Maturity date comes!

4. Small businesses return fiat (principal + interest > initial loan received) via Debitum Network ecosystem.

5. You continue investing with your balance in other loans on Debitum Network. Rinse and repeat.

6.1 You decide to withdraw your balance! Interest can be withdrawn in fiat.

6.2 Original investment in crypto (held as collateral by MakerDAO) is converted to Dai Stablecoin on Oasis exchange.

6.3 Dai Stablecoin is transferred to MakerDAO.

6.4 Original Ethereum (or DEB tokens, when functionality is enabled), excluding the amount needed to settle Dai emission (fee) is returned to your wallet.

What competitive advantage does Debitum Network gain from the collaboration?

• Using 3rd party stablecoin emission mechanism (instead of using our own) ensures more transparency and liquidity for investors. (In the unlikely case of default, investors will get back their crypto).

• As more investors will want to open their Dai positions, while some will want to close their Dai positions – Debitum Network as a unified partner will be able to increase efficiency and lower costs of Dai – fiat exchange and related fees.

What unique business opportunities does that create?

• We allow crypto investors (especially crypto holders) to invest and help local fiat-based SMEs today.

• We open a new investor market for local SMEs – crypto individuals who would otherwise, not invest fiat into businesses.

 


Disclaimer: It is important to point out that the approach presented here is not necessarily suitable for everyone and is presented for information purposes only. It is not intended to be investment advice. You should seek a duly licensed professional for investment advice matching your specific situation.

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