Federal Money - First Global People Powered Central Bank

cryptoinmind (30)in #federalmoney • 3 years ago

Overview
The consumer finance market is 43 Trillion market. The cryptocurrency lending system is new and growing but offers great consumer value because of its open finance architecture. The reduction in cost due to the lack of traditional infrastructure makes it more efficient.

The Decentralized Finance market is a little over 50 billion USD as of 2021, whereas the global financial market stands at 22+ trillion USD. There are three main reasons that are limiting its mass adoption Complexity, Transaction Level Interoperability, Collateralization. These factors are primarily responsible for limiting business use cases available in the crypto world. The Federal Money protocol primarily aims to bridge this gap by eliminating some key inherent limitations, thereby driving system scalability to the north.

What is Federal Money?

Federal Money is building a new-format monetary system that will create a global algorithmic central bank, which in turn will have an edge computing retail banking nodes network. This algorithmic currency system will allow global interoperable banking infrastructure to bring DeFi to the more traditional use cases in the fiat world.

The vision of Federal Money

The future of the monetary system is to be One, Unified, and Global, run by state-of-the-art technologies including blockchain and advanced artificial intelligence. This technology and intelligence will be enabled and governed by edge computing nodes owned and powered by individuals (not institutions), who will run and operate the network. These operators are banking node managers and will be rewarded for their participation.

The Federal Money protocol vision is to establish a full-stack forward-looking open lending and borrowing infrastructure powered by an algorithmic decentralized global bank that will eventually create the future of the financial system.

Features of Federal Money

A Single Unified Currency System (Multi Lever Algorithmic Stable Coins) Though the volatility of the cryptocurrencies has been addressed by introducing stable coins, the mechanism to attain stability is still a big question mark. On the other hand, algorithmic stable coins have not been able to provide the much-needed stability. To provide much more reliable and predictable stability to the stable coin Federal money has introduced a multi lever stability mechanism that will be optimized the configuration of the levers. It will increase or decrease the supply of stable coins in the market to stabilize the price enabling scalability and decoupling the stable coin from currency risk. The stable currency will act as a bridge between the crypto and the fiat world that will enable an open lending use case with better tangible incentives for adoption.

Decentralized Global Banking Nodes (AECB — Algorithmic Edge Computing Banking nodes)

The FStar program gives an opportunity to the banking nodes (individuals) to establish their leadership at various levels through the global leaderboard, earn huge rewards by performing the pre-defined job functions, thereby deepening adoption massively. FStar members will act as ‘AECB’ (Algorithmic Edge Computing Banking) nodes with an ability to perform, contribute and facilitate functions such as distribution, risk management, lending & borrowing, payments, validations & reconciliations, and several other activities to earn exemplary rewards. The AECB nodes will serve a function similar to retail banking and more at an individual level for adoption growth.

First Uncollateralized lending system in Crypto (Crypto Credit Rating System)

In the Decentralized Finance world, the only mechanism to safeguard the lending positions for the lenders is over-collateralization. This impacts the scaling adversely. Federal money designed a solution (Machine Proof of Credit — MPOC) that establishes the borrower’s creditworthiness in the DeFi world in the form of Universal Credit Score (UCS). This to be a path-breaking feature that is going to be used by all the lenders across platforms also this cab be extended to institutions and enterprises subsequently by analyzing their financial condition and performance.

Borrow, lend and buy anywhere (Interoperable Multi-Chain and Multi-Currency Bridge (IMMB) IMMB is a mechanism to obtain cross-geography, cross-chain interoperability. Crypto transactions are platform-dependent and in most cases, the currencies need to be pre-converted as required, before making transactions. This brings disruption in the business flow and end-user experience. Federal money has introduced a system in which transactions can be done in any currency on any platform without the need for any pre-conversions. In addition, they have created a set of stable coins parallel to the national Fiat currencies (FUSD, FEUR, FINR, etc) which will facilitate seamless exchanges either with the global stable coin (FZero) or with other national Fiat currencies.

On-Demand and Anonymity — (Federal Anonymity & Privacy Protocol (FAP) The growing people’s participation in the crypto market significantly increase challenges in terms of wallet security, surveillance risks & monitoring, and privacy threats. Federal money has preempted this aspect and in order to safeguard the community and offer them a choice, we bring a feature in our protocol that allows the transaction’s disclosure decisions in their hands. This will give people more confidence while transacting in cryptocurrencies and will further reinforce adoption.

Token Model

For successful implementation of open finance lending platform with an algorithmic decentralized global bank, the Federal Money has two token models.

FZERO - Stable Token

FZERO is the stable token of Federal Money. FZERO token pegged to various fiat currencies in phases. The supply of FZERO is expanded and contracted to maintain the peg.

Utility of FZERO Tokens

The merchants, customers, users will use FZERO as a stable medium of exchange on the platform.

By depositing FZERO, Lenders can provide liquidity on the platform to earn higher interest rates.

When borrowers decide to borrow FZERO they can avail discounted interest rates.

FZERO will be used in various decentralized liquidity pools where users can stake their tokens and earn rewards.

Enabling settlement in FZERO tokens on the platform between lenders and borrowers.

Native Incentive Token (FDRL)

Native Incentive token is the currency in which miner rewards and stimulus grants will be denominated. The Federal Money Native Incentive token represents the mining power and a deciding factor for allocating the block-producing opportunities. It also helps in stabilizing the price of FZERO by creating an arbitrage opportunity for Native Token holders during the expansionary cycle.

Utility of Native Incentive Token

Incentivizing the validators on a pro-rata basis in addition to the percentage of the transaction fee.

Incentivizing the lenders and borrowers on the platform by distributing Native Incentive tokens daily other than the interest they would earn.

Lenders supplying Native Incentive tokens on the platform will get higher interest rates compared to other assets.
Similarly, borrowers who borrow Native Incentive tokens will receive a discount on the interest to be paid to the lenders.

Native token plays an important role in creating a formalized path through governance ability. The role of Native incentive token holders would be crucial in governing the entire ecosystem.

Conclusion
The Federal money envisions to solve both volatilities and incentive problems in crypto adoption. Federal money will allow users to avoid traditional credit systems using the point of sale lending system to borrow and spend. It is just like using credit cards in the fiat world, making crypto lending and borrowing faster, easier and cheaper to access, earn and use for day-to-day transactions.

Federal Money - First Global People Powered Central Bank

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