A Decentralized Financing Approach By Debitum Network
Debitum Network is recognized as an advanced hybrid ecosystem for small to medium business financing, using the Ethereum blockchain based system together with principal and interest moved using fiat. This ecosystem-based on decentralized and dedicated communities collaborating SME borrowers, local and international risk assessors, debt collectors, insurers as well as investors worldwide with interconnected trust-based smart contracts.
The platform purposed to decentralize the financing system. Presently, all levels of the financing process are conducted by one financial institution in a centralized way from the very start to the very end. As a result, such a financier can only work in the local market due to the lack of infrastructure abroad, or otherwise, it becomes very expensive. Furthermore, the inclination of financing is also restricted, ending in only a fraction of SMEs’ needs being satisfied.
Debitum Network is a network where participants globally will implement separate steps of the financing process. Associations between business borrowers and lenders are complicated, but they can be standardized and streamlined that’s why Debitum develop an Ethereum-based decentralized ecosystem in which operators of the funding market can access their clients innovatively with lower expenses.
How Debitum Network Operates
Operators are businesses or even individuals who either aggregate the demand (investors and lenders), or supply (borrowers), or both. There are also service providers like risk assessors, insurers, debt collectors, provision or collateral valuators, etc. Debitum Network will also operate like an integration medium for several technical solutions which are related to the financing process. While technically, regarding efficacy, Debitum promotes the process of financing, it is an opportunity for professional operators in the financing industry to access the global market with no restrictions.
Debitum aims to build a self-growing network based on trust by consolidating fragmented regional registers of business borrower trustworthiness on the blockchain foundation. Debitum purpose is to grant access to the productive SME capital market for everyone. Today, investments in SME debt are profitable, relatively secure, and yet not simple to get involved into. Debitum Network will take the challenge and solve this problem.
The DEB Token Economy
Debitum network’s native currency DEB tokens are primarily utilized by borrowers to pay for services rendered by the ecosystem members during the financing process, e.g., for validation of loan application or credit risk evaluation. Investors will also use DEB tokens to obtain services on the ecosystem, e.g., to guarantee a loan or portfolio of loans.
A limited amount of DEB tokens was produced during the Token Generation Event (crowdsale round A). No additional minting or mining of the tokens will be possible, which indicates that the token supply is fixed. As Debitum Network develops and incorporates more and more borrowers, investors and services providers of the lending process, the token demand will grow, which, given the fixed supply, will raise its value. In other words, DEB token is devised to increase in value as an activity within Debitum Network grows. Debitum Network model does not permit the burning of tokens in any situation, i.e., it is designed as a pure utility token.
The Team Behind The Success
The founders of Debitum Network, Mārtiņš Libertš, Donatas Juodelis, and Justas Šaltinis, have an exceptional background in both financial and technology sectors. Together, they have already built a successful invoice financing company and IT services and can leverage this experience when developing a lending platform based on the currently most outstanding IT solution, the blockchain technology.
In addition to the core management, Debitum Network has introduced a team of developers and business development managers, who are already accomplishing on the deployment of the platform.
Development and Update
Debitum Network has already raised $1.2 million, adequate for initial product development and launch in the first market. Upon achievement of Crowdsale Round B, Debitum Network will pursue Stage 1 development: setting up the ecosystem in 15 countries across Central and Eastern Europe (CEE) and Balkan region. Stage 2 represents expansion into four major geographical regions outside Europe. Overall, Debitum Network endeavors to establish operations in 50 countries with the worst indicators for access to credit.
On August 23, 2018, European crypto community members and Lithuanian finance professionals assembled to Vilnius Blockchain center to test the efficacy of Debitum Network as an aspiring alternative financing ecosystem.
The Debitum Network founders cleared that they never intend to compete with the traditional centralized banking, but they desire to improve the current financing market with a purpose to promote the growth of small to medium enterprises (SMEs), a sector profoundly dependent on favorable financial assistance.
The event highlighted the Vice Minister of Economy and Innovation of Lithuania, Elijus Čivilis, reiterating the significance of alternative financing and affirming that the SME funding gap is a global dilemma like Lithuania where small enterprises are the central economy drivers and that projects like Debitum Network are critical. Also, the CEO of the Blockchain Center Vilnius Eglė Nemeikštytė stated that Debitum Network does not only demonstrated an excellent example for other startups but also proves a point to the blockchain skeptics.
The new and advanced Debitum Network platform was officially launched on September 3, 2018. Registration is now available for investors, borrowers and service providers.