The new realities of the information movement require financial system reform. This task was set by the developers of the DCC project- the Distributed Credit Chain. They understand that the task is big and it may take from 5 to 10 years to solve it, so they divided the problem into parts and started with a credit system.
What's the Problem Exactly?
Centralization. Financial transactions depend on the approval of large financial institutions. They are monopolists and set rules, high loan prices for borrowers and low interest rates for lenders.
Cost-sharing system. Now financial institutions are putting all their costs into the cost of loans. They include any losses as well as non-repayable debts. Everything is built so that any expenses are compensated by “bona fide” borrowers.
Low efficiency. A lot of time and resources are spent on checking the creditworthiness of the borrower, on its compliance with the risk criteria, but still non-refundable loans are formed.
Unauthorized storage and trading of borrowers and creditors personal data. In the existing system, the personal information belongs to the person, but he cannot dispose of it. The right to use this information is held by the organizations that store it.
Many financial institutions are trying to expand their customer base to increase income, including all new categories of people who are often unable to return the borrowed funds.
How DCC Solves the Problem?
The basis of the new approach to lending is the blockchain, smart contracts and utilitarian platform token.
- Borrowers create a personal account, provide their data to the service provider and submit a loan request.
- Data providers record personal information of the borrower in the blockchain, check and filter it, make out in a standard form, which will be used by other categories of system participants.
- Providers of algorithms and computation, analyze data, and make evaluations.
- Institutions that take credit risks manage the credit business. Their functions include acquisition of decisions on loans, management of borrowing processes, collection of information on the performance of obligations by the parties.
- Financial providers assess the prospects of funds using and finance credit funds.
Distributed Credit Chain Token.
The Distributed Credit Chain ecosystem is based on the DCC token (ERC20 standard). All services provided by any member of the system must be paid for by DCC tokens.
Commissions received from borrowers are distributed so that after payments to all participants there is about 40% which arrive in the remuneration fund. If the credit transaction has been completed successfully and on time the borrower has paid the principal amount and interest, then those 40% come back to him. If the transaction was problematic and wasn’t closed in due time, the funds are transferred to the creditors accounts.
All tokens participating in the ICO are already distributed. Token sale is finished.
The Distributed Credit Chain project aims to change the existing financial system. Instead of centralized management, which corresponds to the increased risks of hacking the system, monopolization, unauthorized personal data sale, low efficiency, high tariffs, etc., decentralization, blockchain and smart contracts will be used.
At the first stage, the main focus of the DCC is the credit system. Due to the introduction of the platform, tariffs for loans and interest rates for borrowers will be reduced, artificial intelligence will be used in risk management, and credit history will be created automatically. For creditors, the interest rate will increase by eliminating intermediaries and standardizing relations with other process participants. The project creates more favorable conditions for all major participants.