RCN Network Diagram.

On September 9 2016, Ripio (the South American company whose core team developed the RCN lending protocol) submitted a patent application for a new loan transactional model. The patent application number 6238529, described the systems and methods on which distributed ledger assets could act as collateral for FIAT credit lines.

According to the company, this original idea was the predecessor of RCN´s protocol design which does not require a collateral and uses a 3rd party agent to reduce and/or prevent defaults: the Cosigner.

The loan models described on the patent, include the development of a wallet and a debit card (aligned with the loan credit to be spent by the borrower) as well as the possibility to create a borrower´s credit-risk history and identity assessment to be included on the blockchain.The company is trying to set the ERC-939 proposal (developed by RCN Lead Developer) as an industry standard. It´s currently being analyzed and discussed by the developers community.

“The Bitcoin-based collateralized loans we envisioned in 2016 inspired our evolved concept of RCN. Using high potential applications of distributed ledger assets, we are also refloating this concept as we notice a huge opportunity. For example, we are now exploring non-fungible tokens (ERC-721) on Ethereum´s Blockchain as a potential collateral for the loan. These non-fungible tokens would have specific value for lenders and borrowers that agree in a loan transaction. The “Cosigner” acts as an escrow to protect the collateral and transfer the asset to the borrower or lender based on the default/loan repayment conditions. We are working on a prototype on this regard that we expect to unveil soon” stated David Garcia, RCN´s Managing Director.

Disclaimer: The post refers to a provisional patent application which acts as a precedent but grants no rights at present time.