ABLE | Banking on the Blockchain

collinberg (6)in #blockchain • 8 years ago (edited)

Banking is something we can’t do without. For decades now, financial services have been regulated by designated financial platforms and banks top the chart. Banks share same interest as other businesses – profit-making.

The major source of income for banks is when they issue loans. Apart from crediting your account with funds, you’ve automatically allowed banks have access to such funds and use them as loans.

Except you voluntarily asked the bank to use your fund as serviceable loan, you get nothing in return. In essence, banks serve as intermediaries between borrowers and investors. You don’t get to meet the supposed borrower. By this, banks have full access to interests that loaned funds will accumulate.

There have been decentralized platforms offering financial services modeled after the traditional banking model but with a different means of exchange – cryptocurrencies. These platforms didn’t survive the persisting onslaught because they got influenced by traditional banking. Thus, their platform was centralized and by operating separate loans and deposit services, there’s no possibility of reducing potential risks in the system.

ABLE’s Solution

The ABLE platform aims at solving the above problems in the traditional financial system. The blockchain technology through its Distributed Ledger Technology (DLT) and consensus algorithms had succeeded in diversifying the global financial system.
With this in motion, ABLE will remove the use of middlemen in the financial system. You don’t need to visit your bank to get a loan. Banks are known to get funds at low interest rate and top up same interest rate with wider margin when lending funds. ABLE wants to make the system viable for all.

It allows you get loans directly from the investor. When this happens, both investor and borrower will have sufficient interest to gain from their transaction. The scenario happens this way: the borrower pays less interest rate and the investor does not lose part of his revenue to third-parties (banks).

Functionality

Take a look at the picture below. That illustrates ABLE’s use case. Aside connecting borrowers to investors, businesses can also pay staff salary using the platform. ABLE cuts off middlemen and by using its smart contracts, it links the two parties: investor and borrower. Risks associated with traditional model such as a borrower eloping with the fund is not possible here. ABLE’s smart contracts only links you to verified and trusted users. Personal information is stored in distributed ledgers and unlike centralized storage they cannot be hacked.

Lending Machine Engine

The platform does not match borrowers to investors by default that is where the lending machine engine comes in. In centralized financial platforms, banks regulate interest rates to be paid for loans and deposits.

ABLE’s lending machine engine automates how much is accrued to a loan or deposit as the case might be. The machine brings involved parties (investors and borrowers) and helps them decide what rate is suitable for the given loan.

Cryptographic Collaterals

The platform also supports use of cryptocurrencies as collaterals for fiat currency loans. ABLE’s smart contract automates payment of loan and interest rates. It also oversees issuance of cryptographic currencies as collaterals.

The idea here is to make cryptocurrencies more acceptable in payments and other financial transactions. The implication is that cryptographic currencies will soon be accepted as collaterals in real-life setting.

Token Specifications

Token Ticker: ABLE
Platform: Ethereum
Exchange Rate: 1 ETH= 320,000 ABLE
Total Token Supply: 25 billion ABLE
Soft Cap: 10,000 ETH
Hard Cap: 25,000 ETH
Accepted Currency: Ethereum (ETH)

Wrapping Up

ABLE is a great project and just as it name sounds, it is really ABLE! The platform will remove intermediaries from the financial system and make access to loans easier. Borrowers and investors will be major beneficiaries because they’ll be in charge of interest rates and also have profit and trust fostered among them.