ABLE
ABLE is create a solution to problems with traditional bank lending-deposit spreads, and nontransparent and centralized cryptocurrency financial services, basing the solution on the transparency and reliability of a blockchain system. The ABLE project is the cryptocurrency-specific financial solution that provides cryptocurrency financial products through person-to-person loanmatching systems and decentralized exchanges.
ABLE project will create a platform that enables cryptocurrencybased financial activities to center around the ABLE account, emanating from the fact that banking activities are carried out primarily through bank accounts.
CASE STUDY OF LOAN BROKER RISK: SALT
SALT is a banking service cryptocurrency solution that lends money in fiat currency backed by cryptocurrency as collateral. Using the multi-signature technology that only allows a withdrawal with the signatures of both intermediaries and borrowers, this solution alleviates intermediary risk and thus distinguishes itself from existing solutions. However, the SALT structure stipulates that without signatures, users cannot receive ownership of cryptocurrencies in return. While the platform uses smart contracts, until it becomes decentralized it cannot be an ideal solution to intermediary problems. Most lending platforms are also vulnerable to managers’ moral hazard because intermediaries retain customers’ cryptocurrency assets.
PONZI-SCHEME TYPE CRYPTOCURRENCY DEPOSITS
There are cryptocurrency deposit services in the form of Ponzi schemes that pay unsustainably high deposit interest rates. These services attracted customers by providing interest rates as high as 10% per month in the six months following launch. The Government of the United Kingdom has imposed sanctions on Ponzi-type fraudulent cryptocurrency financial services. Ponzi-scheme type cryptocurrency services that collect money on an arbitrage profit-sharing model also have emerged.
CONCLUSION FROM ANALYSIS OF CASE STUDIES OF CRYPTOCURRENCY BANKING SERVICES
Cryptocurrency banking services are still in their infancy and do not have established business models. Most attempts to solve their problems have separated deposits from loans. This mechanism was not sustainable under the weight of high deposit rates and failed to solve the intermediary-risk problem caused by centralization. The ABLE project aims to create a solution to existing problems and a better system through the investing-lending matching engine and various financial services that provide account-based links between investors and borrowers.
INVESTING-LENDING MATCHING ENGINE AND SMART CONTRACT
An order book for investing and lending is created based on investing and lending demand from
users. Once an invest or lending transaction is carried out based on the order book, a smart
contract is created to execute the investment or the loan. The borrower’s cryptocurrency will
be set up as collateral and the contracted loan will be given. Then the investor will receive
corresponding interests.
INVESTING-LENDING MATCHING-ENGINE BUSINESS MODEL
Collateralization of cryptocurrency, loan payment, and interest payment are also carried out
through smart contracts. Users can invest any cryptocurrency set up as collateral in mutual funds
listed on the ABLE network and various investment products, but cannot make withdrawals. Any
investments made by cryptocurrency collateral can be automatically liquidated through smart
contracts to preserve the value of collateral, in case value of the investments declines.
More info, visit
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