ZPER: Problems and Solutions #2
Hello, this is team ZPER!
This is the second post about the problems in the traditional financial market that became the driving force behind the creation of ZPER and the solutions we offer.
Please refer to our previous post for information about the general P2P financial environment upon which ZPER was constituted.
https://steemit.com/investment/@zper/zper-problems-and-solutions-1
Let's get right on to our next point!
Problem #2 ::
Difficulties in Allocating Safe and Efficient Portfolios
Even when P2P finance companies conduct a multiple different high level risk analyses, there still exists the possibility of some debts becoming insolvent. This is a kind of problem that is universal in all financial sectors. Particularly in P2P finance, a platform that connects investors and borrowers, the investors are the ones who have to bear all the risks caused by insolvent debts. This is the reason that funds of the investors should be invested in multiple types and number of loans.
The example of Lending Club below shows that diversification of investment in approximately more than 146 loans
could prevent loss of principal even in the worst cause.
At the same time, while interest rates in some developing countries remain high, real interest rates in developed countries such as Japan almost reached 0%, hence the discrepancy among countries. Investors in countries with low interest rates do not pay high interest rates. It takes free movement of investment funds across the borders to resolve this problem, but the hegemony for this is still in the hands of the existing financial institutions.
Base interest rates in different countries
Consequently, to design safe portfolios, investment should be diversified over a number of debts, a range of P2P lending companies, and different countries through free flows of funds. However, it is in practice impossible for investors to sufficiently diversify their investment for themselves within the current P2P finance market structure.
ZPER's Solution ::
Creating a Transparent and Sound Investment Environment based on a Smart Contract
ZPER will use Smart Contract to prevent any disputes from even arising. It provides roles, obligations, and rights of each participant in advance, and the investment contract will become effective upon its conclusion. It will also allow
movement of funds for investment and reimbursement, and obligations and rights of the parties to the contract to be modified automatically depending on the implementation of the contract terms.
There also exists a ZPER Council that monitors participants within ZPER ecosystem to maintain its order. The Council can monitor qualifications and status of all participants in real time and restrict their activities in case of any violation. By doing so, the risks caused by P2P lending companies and related service companies can be minimized.
Problems inevitably arise in all fields and in all time.
What's important is our will to improve and to try new things.
If you agree with the ways of ZPER, please show your support and stay tuned for more news!
Sincerely,
Team ZPER
