Crowdlending e-commerce fintech platform based on the Hyperledger Fabric for monethero

Build a decentralized platform that would allow the lending process based on blockchain.
Goals
  • Build a decentralized platform that would allow the lending process based on blockchain.
  • Integration of an external system providing loans’ data with the ability to store this data on the blockchain network.
approach
Approach
  • Implementation of back-end logic and API for receiving data from external platform Telescopo.
  • Implementation of chaincodes enabling verification of loan data stored on the blockchain.
  • Configuring a Hyperledger Fabric network on client’s AWS cloud infrastructure.
  • Creating a mechanism enabling the transformation of loan data to the blockchain.
  • Creating user and organization permission policies within Hyperledger Fabric.
Results
  • A decentralized platform that enables crowdfunding loans.
  • Better security of financial data than a standard database.
  • Clients have access to secure online loans based on blockchain technology.

What was the industry context?

During the pandemic era when shoppers significantly cut back on stationary purchases in favor of e-commerce, online sales has become one of the fastest-growing industries with high stability of turnover at the same time.

This provides collateral for the loan, due to the large number of customers, whose value of each transaction is a small fraction of the sum of all trade-related turnover.

Therefore, Monethero made a business decision to create a platform that would provide e-commerce sector with a direct access to debt financing. 

The goal was to create a place that would serve as a safe haven for lenders, borrowers, security administrators, and any other permitted third parties that could possibly enter into loan agreements and access their entire portfolio of executed loan agreements and other key documents.

Why did Monethero choose blockchain?

There are many entities involved in the process of signing and repaying a loan agreement. Accordingly, the fundamental elements of the technical infrastructure of the Monethero platform had to be security, full transparency of information, standardized rules for verification of source data, and decentralization of data recording.

Blockchain is the technology precisely meeting the above requirements. That is a type of database which ensures the immutability of the history of the recorded data. The specificity of a register created on a blockchain is that all individual events are registered chronologically within a cryptographically encrypted block, and the blocks are connected in the form of a chain.

What was the role of Espeo Blockchain?

We began our work by consulting and defining the scope of work, as well as selecting the blockchain technology that would fit the Monethero project best.

We have chosen Hyperledger Fabric, as it a private blockchain, and one of the most mature blockchain frameworks available when it comes to the fintech industry use. HLF is also used by many important financial institutions on Monethero local market i.e. KIR (National Clearing House).

As a first step we configured and deployed the Hyperledger Fabric network on AWS cloud client infrastructure.

It was followed by creating and implementing the back-end logic and API for receiving data from Telescopo’s external platform. This allows Monethero platform to retrieve data from Telescopo, regarding signed loan agreements and generated loan repayment schedules.

We also implemented chaincodes that enabled the verification of loan data stored on the blockchain. Thanks to this all data related to specific loan agreements can be safely stored on the blockchain.

We have also created permission and security policies for users and organizations which settles who can view specific data stored on the blockchain network.

The final step was to perform system testing and then release it to the production environment.

What are the Smart Contracts?

A Smart Contract is a self-executing record of the terms of the Loan Agreement confirming its conclusion by both parties to the agreement and the payment schedule of the loan installments, stored as executable programming code in the blockchain network guaranteeing the immutability of the records.

Each Smart Contract receives its own unique number that cannot be changed by anyone. The first automated record of a Smart Contract is the first link on the blockchain, where the data describing the rights and obligations of the parties to the Loan Agreement and other terms and conditions associated with a given Loan Agreement are located.

technologies

How does the Monethero platform work now?

Through the platform, customers have the opportunity to reach thousands of potential investors willing to support your project starting from the Loan Agreement amount of 50 000 PLN.

Registration, submission of the Loan Application, conclusion of the Loan Agreement, and other agreements are done entirely electronically on the Platform. The deadline for receiving the financing depends only on customer, that is the time user needs to provide the necessary documents to the Platform.

It is the borrower who determines the interest rate of the loan and the costs they are willing to spend on the process of obtaining financing on the Platform.

  • Writing new and updating Loan Agreement data (and other terms and arrangements associated with a particular Loan Agreement).
  • Reading the terms of a Loan Agreement.
  • Reading the history of Loan Agreement terms.

 

Once the terms of the Loan Agreement are accepted by the lender and the borrower, the first automated record of the Smart Contract is created on the Monethero Platform.

About Monethero

Monethero is a crowdlending e-commerce fintech platform using blockchain technology based on the Hyperledger Fabric. The solution is specifically aimed at the SME sector as easily accessible and inexpensive capital.

Loan crowdfunding provides an opportunity to raise debt financing from individuals and companies.

Unlike a bank loan, a loan crowdfunding on the Monethero Platform can be obtained by any company that provides the required collateral and convinces lenders of the financing.

For the lender, crowdfunding on the Monethero Platform provides the opportunity to lend to multiple companies, which disperses risk and the opportunity to earn higher interest rates than bank deposits.

monethero

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