The Ripio Credit Network is a global network built on co-signed Smart Contracts and Blockchain technology. The network seeks to connect lenders and borrowers around the world in any currency. Agents use the Smart Contracts to analyze a borrower’s credit risk impartially, thus standardizing lending practices through Blockchain technology.
The network came into being as part of an effort to chart a new path in the digital economy. The project's primary goal is to widen the financial inclusion such that credit lending services can be made available in Latin America before expanding to other parts of the world.
Ripio is currently offering financial freedom to regions in Latin America that lack banking. The platform sells Bitcoins in local currencies that facilitate online transactions and easy peer-to-peer payments.
History of Ripio Credit Network
Ripio Credit Network came into being in 2013 backed by BitPagos, the first Latin American Bitcoin payment platform for offering Bitcoin-based financial services. Ripio transformed into a digital wallet in 2014 to provide a way for receiving, storing, sending, and buying Bitcoin in local currencies.
BitPagos rebranded as Ripio in 2017 as it sought to meet the needs of existential clients. The platform currently supports over 100,000 clients. At inception, a total of 1 billion RCN Token supply were issued with a hard cap of $38.3 million.
Problems Ripio Aims to Solve
Credit markets don’t reach a fraction of the world’s population. The problem is exacerbated by the fact that lenders don’t have a way to assess the risks in a bid to offer services. Ripio believes it can solve this problem by leveraging Blockchain technology to gather valid and accurate information that lenders can use to offer credit.
Ripio Credit Network uses Smart Contracts and Blockchain technology to connect lenders and borrowers regardless of the currency of use. The parties involved in the Ripio Credit Network include:
Makes a credit request and receives a loan in the local currency.
Verifies borrower’s identity.
Generates a Smart Contract by specifying the terms of the loan. He also receives funds from lenders via credit exchanges and distributes the same funds to borrowers and order agents.
Awards credit scores to borrowers
Acts as a guarantor for borrowers. He or she may act as a local agent in the borrower’s country of residence in the event a borrower defaults.
How Does Ripio Credit Network Work?
Ripio acts as a peer-to-peer network based on cosigned Smart Contracts. A co-signer acts as a re-insurer that distributes and reduces lenders risk, while at the same time helping improve contract conditions by retaining borrower’s local legal system.
For any loan request, a wallet provider is required to generate, fill, and sign a Smart Contract and then broadcast the contract to the network. The contract contains information such as interest rate and the number of installment payments the requester needs to make. The contract is then completed with data from an ID Verifier, a scoring agent, and a co-signer.
A lender who wishes to invest in the Ripio Credit Network is required to make a request with a few requirements such as interest rate and due date.
Ripio Credit Network works by democratizing lending on the Blockchain thereby eliminating the need for middlemen such as banks and other financial institutions. This helps eliminate high loan and transactional fees that are synonymous with traditional lending systems.
RCN Tokens power the Ripio Credit Network and are used to facilitate transactions in the network. ID Verifiers get paid in RCN Tokens for verifying borrower’s identities. Scoring Agents also receive the tokens for rating borrower’s creditworthiness. Lenders also require tokens to access the platform.