Overview

The Ripio Credit Network (RCN) is a protocol based on smart contracts and blockchain technology, which builds upon a current service offered by Ripio in their operating country of Argentina, Ripio Credit Services. The protocol aims to enable global connections between peer to peer (P2P) lenders and borrowers, regardless of currency. RCN will look to reduce traditional bank lending costs and fees, while offering a superior credit experience for both parties.

RCN’s main point of differentiation within their network protocol is an “old school” credit guarantor, i.e. Cosigner. By including a loan guarantor (Cosigner​), RCN seeks to minimize the Lender’s credit risk in case of a default by taking over the defaulters loan payments while simultaneously seeking resolution within the country of loan origin.

Business Model and Strategy

RCN seeks to marry the P2P internet lending economy with the frictionless perks of blockchain decentralization to offer a better credit experience to the banked and unbanked population. For example, the rise of the P2P loan ecosystem enabled greater access to loan investments for investors while providing a more efficient, faster, and cheaper loan for borrowers. However, the lender under certain circumstances had limited recourse if loans went into default or arrears; especially if the Borrower and Lender were located in different areas of the world, under different credit laws.

Beyond the technology, the value proposition that RCN is offering to clients is a loan guarantee, i.e. in theory a risk-free interest rate yield. Thus, if a loan made by a Lender goes into default or arrears, the Cosigner (guarantor) will assume the liability and make the lender whole (no loss of principal and/or interest payments). RCN’s remedial approach to credit analysis should be sufficient to bootstrap the network in the early days until more actors join globally.

*RCN Whitepaper

Quantitative Model Rating*

Pugilist’s proprietary machine learning model generates a probability of viability that is subject to early stage investment return standards. However, given the early stage nature of these investments, the model should be viewed as directionally accurate versus a crystal ball.

Pugilist’s probability of viability is 52.28% that RCN WILL be a viable ICO.

Conclusion

RCN has a solid team, advisors, and niche market, which should be advantageous for executing their product roadmap. However, the Management Team should take our disclosure recommendations into consideration in order to drive transparency and trust within the network; especially during these early bootstrapped days. Ultimately, RCN’s success will be tied to the growth of the blockchain universe and P2P lending in Latin America, good network incentives, and prudent credit and default management. Pugilist believes RCN has a decent probability of being a viable network despite needing to overcome several hurdles in the short term.

Pugilist’s Investment Rating*

*see full report appendix for rating methodology

Download the full report here.

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Pugilist Ventures is a research and investment firm that operates at the intersection of FinTech and Blockchain. We democratize research for blockchain enthusiasts and individual investors.

Please clap if you got an ounce of digital gold from this read. Please send your comments or requests here and feel free to peruse our prior research here.

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Disclaimer: Neither the author of this article, nor Pugilist Ventures, provide investment, financial, or legal advice. This site cannot substitute for professional advice and independent factual verification. The content provided on this site is for informational purposes only and should not be construed as any kind of solicitation for investment in any investment opportunity.