The main objective of the Swapy Network is to create a more efficient credit market based on the blockchain. The project proposes a solution to connect all the major participants in the financial industry to offer mutually cost-effective services, lower the barriers of entry into the sector, empower the underserved consumer and offer the merits of universal credit access.
Swapy Network seeks to solve a number of extant problems surrounding the financial market space. One major challenge is that there are numerous underserved populations across the globe, particularly in emerging economies who have limited or no access to credit facilities. Banks are hesitant to issue loans to this group in view of the high-risk potential. The few financiers that offer them credit do so at outrageous rates.
At the same time, there are significant disparities between interest rates in the developed world and developing nations. High-interest rate spreads in emerging economies make credit services costly and at times unattainable. Access to information is another challenge for players in the sector with both the quality and quantity of data accessible varying from one country to another. New entrants in the space have a difficult time accessing such information in spite of it being crucial to their success and this has proven to be debilitating.
The Swapy Network proposes to solve all of the above problems using a protocol that comprises of three main applications:
The Swapy Exchange
This application connects international investors and credit service providers around the world in order to create a more efficient money market model. Investors operating in countries where interest rates are low are thus able to work with credit companies in places where interest rates are high, ensuring higher returns for the former and lower capital costs for the latter.
Getting access to credit at lower rates, in turn, means that financiers can afford to transfer the benefits to their customers by lending at lower rates.
Swapy Financial ID
This is a digital identification framework that will hold international validity. This ID simplifies the application process for credit clients since they only have to go through Anti Money Laundering (AML) and Know Your Customer (KYC) processes only once for unlimited access to credit services globally.
Every creditor will have access to their own credit history and can thus access credit facilities with greater ease no matter their location. This will facilitate low-cost credit provisions because access to such pertinent information means lower risks for financiers.
Swapy Data Market
In the current model, institutions are collecting tons of individual data without consent and thus gaining an unfair competitive edge over new entrants. This information asymmetry favors large corporations which, in turn, charge high premiums for credit companies wishing to gain access to the data. These costs are passed on to the consumer and contribute to high-interest rates. The Swapy Data Market eliminates this imbalance and makes data available to all players without discrimination.
On the other hand, data owners are able to commercialize their information by charging an agreed upon the number of tokens for consultation. To ensure data veracity, the application will incorporate reliable data validators.
These three pillars of the Swapy Network create a circular ecosystem for new entrants and established ones alike. All players in the network get incentives for adding value to the concept and working towards its success.
The Inspiration behind the Project
The platform’s CEO, Edmilson Rodrigues from Brazil, left his job at Google in a bid to pursue an MBA in the United States. Unfortunately, due to the constraints surrounding credit access in Brazil, he was unable to achieve this. But instead, he got the opportunity to enroll into Draper University, a Silicon Valley initiative by Venture Capitalist Tim Draper and following this, he got an investment to make his dream of equitable credit access a reality.
Apart from having the legendary Tim Draper as an investor, the project also has the support of Don Tapscott, Lanzame Capital and SU Ventures among other notable names.
Token Sale Details
Swapy Network has scheduled a token sale to raise $30 million worth of Ether for financing its app and protocol development, a five-year project. The pre-sale will take place between 19th March and 19th April 2018 followed by a crowdsale from 26th April to 26th May 2018. The pre-sale and the crowdsale hard cap will each be $15 million USD.
More information on the project and its upcoming ICO is available on the Swapy Network official website.