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Blockchain Technology / How Can Blockchain Improve the Internal Risk-Control Mechanism

« on: April 13, 2020, 06:05:02 AM »

Recently, Zhaoxiang Qiu and Yongyuan Liu, researchers at the Beijing Xi Jinping Research Center for Socialism with Chinese Characteristics in the New Era, published an article in the Guang Ming Daily: “ Taking full use of policy-orientated finance in steady growth.” The article indicates that policy-orientated financial institutions should combine work resumption and domestic demand expansion， improve credit support, and help achieve the dual goals of short-term stable growth and long-term high-quality economic development. Make full use of financial technologies such as blockchain, big data, cloud computing, etc., improve the internal risk-control mechanism, fully prepared for bad debts, ensure the stability of asset quality, and maintain the stability of the financial system.

Taking use of Fintech to improve the efficiency of financial infrastructure is also a goal of financial institutions.

Relying on a cross-border matching platform “Jianrong Zhihe”, CCB Nanchang Branch completed the first cross-border exportation of anti-epidemic materials after overcoming difficulties such as flight suspension and local market entrance access, assisting medical device manufacturers exported 108,000 disposable medical masks successfully. Relying on the systematic “Internet + bank-enterprise financial blockchain” ecology, “Jianrong Zhihe” provides all-round financial services such as credit loan services, fund custody, guarantee services, and risk management for enterprises.

As one of the most challenging innovations in the field of Fintech, blockchain has fundamentally overturned the inherent logic, operating mode and business scope of traditional finance. It breaks through the limitations of the innumerable rules and regulations, entering a totally new application field.

What Are the Internal Risk-Control Mechanisms of Financial Institutions Represented by Banks?

According to statistics disclosed by China Banking and Insurance Regulatory Commission, the number of bank fines was 1,531 (excludes banking leases), and the total amount of fines reached 808 million in 2019. Overall, the number and amount of fines are positively related to the scale of operations. The fines are mainly focused on loan management such as illegal loans, inadequate review of loans, and the misappropriation of loan funds. A great number of violations are in real estate loan financing and the illegal inflow of credit funds into the stock market.

Even though the internal risk-control mechanism of banks is the most complete and formal among financial institutions, it fails from time to time. There are two important reasons:

1. There are branches, sub-branches, and business outlets in the bank. Each branch has 20 to 30 departments, with scattered responsibilities and regulations. The rapid development of Internet finance and banking innovation business challenges internal managers. The internal control management is impossible to achieve all departments, all services and all processes.

2. In addition to several important customers and businesses, banking business is basically handled by branches, sub-branches and business outlets. These managers and institution leaders have great power. However, the asymmetric information among them makes it difficult to control the internal management, which further results in “internal and external collusion”.

How Does Blockchain Improve the Internal Risk-Control Mechanism of Financial Institutions?

As the underlying technology of Bitcoin, blockchain is regarded as a financial technology. Its peer-to-peer, decentralization, and smart contracts characteristics can effectively solve some financial institutions’ problems in internal control, bringing new research directions for internal control system.

1. Real-time synchronization of information based on blockchain technology can quickly identify internal control risks

Since financial institutions has multi-department and multi-node corporate structure, it is difficult to obtain timely information. It makes internal control managers unable to identify relevant risks in time. The peer-to-peer transmission characteristic of blockchain technology enables each node to share the entire network in real time, realizing real-time information acquisition and timely identification of risks. Meanwhile, the decentralization and smart contracts characteristics of blockchain can also reduce part of the risks caused by “human factors” in the business process, establishing a solid foundation for intelligent identification of risks.

2. Based on blockchain technology, data is authentic and reliable, thereby strengthening the internal control level of financial institutions

Blockchain technology can ensure the authenticity of stored data, and any change records will also be stored. These data can not only provide reference data for accurate evaluation of internal control, but also effectively improve the efficiency of the controller. It helps the controller study the history, optimize control process and make the risk prevention more accurate.

3. Blockchain technology will promote the upgrade of financial institution systems

As one of the choices for Central bank’s digital currency, blockchain technology will be inevitably applied in finance industry, whether in internal control, accounting supervision, or internal audit. The advancement of digital currency will inevitably bring new challenges and opportunities to financial institution systems. Because of the difference between the blockchain technology architecture and the underlying structure of existing financial institutions, financial institution systems also need to be optimized and upgraded. It can better deal with new business risks and internal control risks.

Financial institutions have always attached great importance to the improvement of internal control institutions. In structure, they set up internal control departments and positions, and formulated internal control system processes in terms of institutional mechanisms. Every year, a great amount of funds will be invested in advanced technologies such as IT, big data, cloud computing, etc. to improve the internal control level. In addition to the conventional methods, blockchain technology has proposed a new direction for improving internal risk-control mechanism of financial institutions.

Blockchain, regarded as a revolutionary technology, will reconstruct the key underlying infrastructure of Internet finance and even the entire financial industry. We believe that more value of blockchain in the field of finance is waiting to be explored.

The development of blockchain technology has gradually matured, but there are still some technical and cognitive thresholds at the practical level.

DREP is committed towards building Connectors and Toolkits based on Blockchain technology, providing solutions that promotes the ease of use, flexibility and frictionless integration. It can effectively help financial institutions to build a more complete internal control system based on blockchain technology, thereby improving financial institutions’ internal control capability and achieving technological upgrades.

About DREP Foundation

DREP is committed to building “connectors” and “toolkits” based on blockchain technology, providing solutions that combine ease of use, flexibility and frictionless integration. Based on DREP Chain, DREP ID and DREP SDK, DApp R&D teams are able to release multi-public-chain asset versions, built-in wallets and asset trading platforms with one-click.

Cryptocurrency discussions / Understand DREP Technology Roadmap in One Picture

« on: March 23, 2020, 07:19:32 AM »

DREP core technologies include:
(1) The proprietary DREP Chain is developed by the DREP team using the Delegated Byzantine Fault Tolerant (DBFT) algorithm. It is compatible with smart contracts in the Ethereum Virtual Machine (EVM) and WebAssembly (WASM) formats with a dual-layer structure comprising of a stable root chain and customizable sub-chains.
DREP Chain has officially launched 4 Testnets:
DREP Testnet1.0 Darwin core performance summary
DREP Testnet2.0 Riemann core performance summary
DREP Testnet3.0 Euler core performance summary
DREP Testnet4.0 Planck core performance summary
(2) DREP proposes the concept of Smart Pipeline technology, which greatly improves data processing ability. Compared to existing smart contracts, DREP Smart Pipeline would be able to handle more complex application scenarios while offering a more flexible and economical execution process with the consumption of zero gas.
(3) DREP adopts a Schnorr Multi-Signature Algorithm that is based on the Secp256k1 elliptic curve to improve network efficiency and reduce transmission overheads.
(4) To achieve data connectivity and privacy protection, DREP has designed a Decentralized ID (DID) system based on HMAC (Hash Message Authentication Code) algorithm, forming a dual-layer system of master ID and multiple sub-IDs. DREP Client allows users to manage data and assets on centralized and decentralized platforms within one interface.
(5) To enhance data privacy protection, DREP Chain adopts the use of homomorphic encryption to safeguard users’ sensitive information.
(6) To provide an easy-to-use tool interface for 2B enterprises and provide an efficient and frictionless service portal for DREP Ecosystem users, DREP launched a comprehensive DREP Client integrating functions including asset management, identity management, application development, and traffic portal：
DREP Client Beta：
DREP Client V1.3.0 core performance summary：
DREP Client V1.2.0 core performance summary：
DREP Client V1.0.0 core performance summary：
(7) To lower the entry barrier and the cost of learning, DREP has developed API, Plug-ins and SDKs for a number of vertical markets. With these toolkits, DApp #DevelopmentTeam s can deploy on multiple public chains at the same time easily, with built-in wallets and asset trading platforms. With DREP ID, the developers can also acquire users from various public chain ecosystem, converting them into users and making Super DApps an achievable reality.
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DREP SDK adopts a service-oriented architecture, similar to Java’s Spring container development. In most blockchain project code, the modules are more coupled. Using this approach, DREP allows the modules to be fully decoupled and the code can be easily refactored with a clearer logic.
(9) The technical features of DREP BaaS (Blockchain as a Serivice) are as follows:

About DREP Foundation
DREP is committed to building “connectors” and “toolkits” based on blockchain technology, providing solutions that combine ease of use, flexibility and frictionless integration. Based on DREP Chain, DREP ID and DREP SDK, DApp R&D teams are able to release multi-public-chain asset versions, built-in wallets and asset trading platforms with one-click.

General Discussion / Why DREP Is Important?

« on: March 18, 2020, 04:13:55 AM »

Public chain is regarded as a network of value circulation. In the early stage, only tokens were circulated on this network, ex, Bitcoin. At that time, Bitcoin existed as digital gold to store the value. With the development of applications and ecology on the public chain, this network has begun to “support” more things. In other words, the tokens on this network contains more meanings including information, digital assets, equity, etc. For example, DREP and Landream created digital identity of the real estate industry participants, and the tokens contains more connotations such as identity information and corresponding rights.

DREP is committed towards building Connectors and Toolkits based on Blockchain technology, providing solutions that promotes the ease of use, flexibility and frictionless integration. Now DREP public chain and DREP ecology are already known by the public. Meanwhile, as a token in DREP ecology, DREP not only has rich use value, but also has circulation value. This article will elaborate why DREP is important.

1. The Role of DREP in DREP Ecosystem

As we all know, token plays a vital role in the ecosystem. Only when the role of token established in the project ecosystem, can the entire project ecosystem proceed smoothly.

The DREP Foundation was incorporated in Singapore overseas in February 2018. In its latest edition of the white paper, it not only updated the DREP wallet, DREP Bridge, DREP gamification tools, but also perfected the DREP token in the DREP ecosystem. scenes to be used.

The role of DREP in DREP ecosystem includes the following three aspects:

(1) Network layer
In DREP network, all gas and transaction fee are served by DREP tokens, which means DREP holders have the right to use and vote on DREP network.

(2) Tools and applications
In DREP current ecological products such as DREP SDK, DREP Client, DREP tokens are mainly used in payment and equity certificates. DREP holders can use all the applications in terms of tools and products; furthermore, they are able to enjoy multiple asset appreciation rights in addition to Staking.

(3) Cooperation and Ecology

In DREP DApp or the products jointly developed by DREP and its cooperative enterprises, DREP tokens are mainly used as pledged assets. By locking liquidity (but not consuming quantities), it is able to obtain digital assets, equity credits or exclusive identities in the products.

It can be seen that DREP ecosystem planning has started to form a comprehensive value system.

2. DREP Economic Model

For an investor, how to evaluate a token’s appreciation space and whether it is worth holding for a long time is very important. On the one hand, the role of a token in the ecosystem (the use value mentioned above) is significant, it means the real value behind the token; On the other hand, the economic model of the token (circulation value) is also very important. It affects the long-term price trend of the token and is closely related to investment.

According to DREP white paper, DREP is a typical deflationary economic model. The total circulation of DREP is 10 billion tokens, and the current circulation in the market is 2.098 billion tokens.

The total supply of DREP tokens is fixed, while its consumption in DREP ecology is constantly ongoing. Therefore, the number of DREP tokens will be gradually reduced. At the same time, to better manage the market, DREP team gradually launches buyback & lock programs, which will effectively reduce the circulation in secondary market. It can further promote the deflation of DREP tokens.

With the expansion of DREP ecology, the demand of DREP tokens will increase. DREP token is an incentive in DREP mainnet and its circulation supply will decrease because of network transaction and asset staking in applications. While the demand exceeds supply, the price of DREP token can be inferred accordingly. That’s why people are more willing to hold a token under a deflationary economic model.

3. DREP Value-Driven Factors

Generally speaking, there is always value behind the price, so what are value-driven factors of DREP tokens? A project’s value-driven factors are mainly from the financial and non-financial aspects. In the financial aspect, the drivers include profitability, growth, and operation; In the non-financial aspect, the drivers include clients and products.

From the perspective of financial value, DREP's main investment institutions include Huobi Ecological Fund, Kucoin Fund, Qtum Foundation, Block VC, 360 Innovation Fund, Oneboat Capital, etc.

Meanwhile, DREP is the second Startup project announced by Gate.io. The demand quantity of DREP exceeds half of the issued amount in Gate.io.

Currently, DREP has been listed in almost 10 crypto asset exchanges including Binance, Gate.io, Bithumb Global, Binance DEX, and BitMax.

These prove that DREP is a token with great potential and has the pre-conditions of stable appreciation space.

From the perspective of non-financial value, DREP has officially released cooperation with 60+ enterprises in financial, gaming, real estate and other industries from the Middle East, Southeast Asia, Australia and other regions. There are some top enterprises such as gaming unicorn Bijiaqi, Australian leading real estate group Landream; Also, in the next year, DREP will continue to launch:
· DREP Mainnet 1.0 launch
· DREP iOS、Android、WIN、MAC release
· DREP ID v2.0 development
· DREP smart pipeline integration
· DREP DID 2.0 & SDK launch
· DREP reputation system online
· DREP zero-knowledge proof integration

The above-mentioned measures show that DREP project has long-term operation capability and stable appreciation space. As the token in DREP mainnet, DREP token is of great importance because of its rich use and circulation value.

About DREP Foundation

DREP is committed to building “connectors” and “toolkits” based on blockchain technology, providing solutions that combine ease of use, flexibility and frictionless integration. Based on DREP Chain, DREP ID and DREP SDK, DApp R&D teams are able to release multi-public-chain asset versions, built-in wallets and asset trading platforms with one-click.

Bitcoin Forum / Bitcoin’s Function of Hedging Is Questioned? DREP Promotes High-Quality Developm

« on: March 13, 2020, 09:08:18 AM »

In the financial crisis of 2008, Bitcoin was born and its founder Satoshi Nakamoto wrote a sentence in the genesis block: "The Times 03 / Jan / 2009 Chancellor on brinkof second bailout for banks".

Bitcoin Is Considered to Be A Product of Financial Crisis and Has Financial Hedging Function as “Digital Gold”

Peer-to-peer, not controlled by the government, relatively anonymous, and difficult to track, as well as deflationary economic model, all the philosophy of Bitcoin is completely opposite to the current legal currency system by government. Therefore, the financial crisis caused by monopoly and oversupply in legal currency system won’t happened in bitcoin. Bitcoin is considered to be a complement to the current monetary system. Someone call it "the product of financial crisis", and someone also call it "digital gold". They all think bitcoin has the value of asset storage and hedging.

Until then, Bitcoin has been doing well in value storage. The initial price of Bitcoin was $ 0.0025, and it had a big surge after its first halving in 2012. In December 2017, the price reached a peak of $ 20,000, with an increase of 8 million times. After the highest peak, the price of Bitcoin started to fall and it was back to $ 9,000 last week.

The Financial Market plunged, Bitcoin's Hedging Function Is Questioned

On 8th March, the global spread of COVID-19 and the battle over crude oil prices resulted in the financial market crash.

Compared with gold, whose price reached $1,700 in 9th, Bitcoin didn’t perform its hedging function as “digital gold”. Instead, as the stock market plunged, the price of Bitcoin slumped from $ 9,000 to 7,900, with 12% decrease.

Some believe that this crash is because PlusToken traders sold a great deal of Bitcoin, while others believe it is caused by the capital outflow under the poor global financial market.

However, some analysts believe this Bitcoin plunge is in accordance with the law of price. In the end of February, Bitcoin price broke through the support line, signifying a downward trend of Bitcoin market. Thus, the recent decline is just a normal performance, meanwhile, it does not rule out the possibility of a sharp rise due to Bitcoin halving.

As a decentralized electronic currency, Bitcoin has completed part of its historical mission. It makes people re-understand the monetary system and lead to the emergence of DeFi; At the same time, it is also an experiment in financial revolution and we will witness the result of this experiment.

The Shortcomings of Bitcoin and Ethereum in The Field of DeFi

If Bitcoin is the pioneer of DeFi, then Ethereum is the developer of DeFi. Most financial protocols are issued on Ethereum because of Ethereum’s first application of smart contract. There are already considerable DeFi activities including asset issuance, asset exchange, stable asset generation, borrowing, etc.

Facing the challenges in the large-scale application of DeFi in the future, Bitcoin and Ethereum have the following shorcomings:

1. Insufficient Performance

The TPS of Ethereum (about 15 transactions per second) cannot meet the needs of large-scale DeFi applications. When there is a popular application, it will cause network congestion. For users and applications, more improvements are needed in usability and experience.

2. High Gas

When it comes to transaction fees for cross-border transfers, the gas in Bitcoin and Ethereum are acceptable. However, when it is applied in DeFi applications, the gas will be too high during the high-frequent transactions, and affect user profits accordingly.

3. Ecology Barriers

As initial public chains, Bitcoin and Ethereum have formed their own communities and ecosystems. On the one hand, the certain interest groups maintain the development of ecology; On the other hand, it prevents some emerging applications or users from entering the ecosystem. For example, the proposal of upgrading from POW to POS was opposed by Ethereum miners.

DREP Lays a Solid Foundation for The Next Generation of DeFi

DREP is committed towards building Connectors and Toolkits based on Blockchain technology, providing solutions that promotes the ease of use, flexibility and frictionless integration. With the technologies behind DREP Chain, ID, Reputation Protocol and SDK, DREP aims to build an open data ecosystem thereby disrupting the current status quo of segregated users and synchronizing fragmented data found on multiple chains.

From the perspective of positioning and technical characteristics, DREP is a suitable underlying infrastructure for DeFi. It has the following outstanding advantages:

1. High Performance, Low Cost

DREP has proposed an alternative method to improve scalability via the development of the “Smart Pipeline” technology, which is similar to a Layer 2 solution, to improve batch data processing capabilities.

DREP Chain takes form as a dual-layer structure constituting the main chain and sub-chains to improve scalability and the efficiency of the blockchain infrastructure without affecting security or decentralization. In DREP's open-sourced Testnet, DREP Chain achieved peak TPS of over 12,000 in a public benchmark test conducted on January 8th, 2019.

2. DREP DID Supports Cross-Chain and Cross-Platform Asset Management

DREP ID supports multi-asset payment and exchange through the DREP Client application, giving users access to a convenient one-stop account management. In addition, binding different platform addresses to DREP ID allows cross-platform transfer by way of cross-chain interoperation.

Such functionality is not just confined to blockchain. For traditional/centralized platforms within the DREP network, cross-platform management such as asset and data integration, encryption of information, etc. is also available through DREP ID without any interference on the existing numerical systems, loyalty point system, economic system or other aspects of the original platform, thereby forming an interconnected decentralized ecosystem.

3. DREP SDK Lowers the Threshold for DeFi Development

The DREP SDK supports a wide variety of DApps. With DREP SDK, DeFi application developers are able to deploy on multiple public chains with relative ease, and develop customized SDKs for vertical domains.

DREP SDK for blockchain games has the following features, including but not limited to:
· Gaming account module: Cross-chain DREP ID removes segregation of user base across different public chains;
· Payment & trading module: The built-in payment and trading engine can further improve the experience of trading digital asset;
· Digital operation module: Visualization of operational data and in-game economic system, ensuring transparency and allowing configurability.

We believe that the development of DeFi will not stop because of Bitcoin fluctuation. And during this process, with its technology and community advantages, DREP is ready to lay a solid foundation and facilitate the new generation for DeFi.

About DREP Foundation

DREP is committed to building “connectors” and “toolkits” based on blockchain technology, providing solutions that combine ease of use, flexibility and frictionless integration. Based on DREP Chain, DREP ID and DREP SDK, DApp R&D teams are able to release multi-public-chain asset versions, built-in wallets and asset trading platforms with one-click.