Persistence is a non-conflicting or interoperable Middleware which fuels Debt Marketplaces responsible for matching facilities with surplus capital (lenders) with those that require finance (borrowers).
The promotion of smooth transaction of value on a global scale for the purpose of increasing the speed and execution of cross-border businesses and funding is the mission of Persistence.
Hence, we can say that Persistence is a system that seeks to make available the sovereign environment or atmosphere for Decentralized Institutional Finance Applications to be set up and executed.
Every mission has a reason behind its existence. For Persistence mission, here’s the reason why it was initiated;
With respect to debt, a basic and fundamental imbalance exists between the supply and demand of capital and this is a worldwide issue. There really hasn’t been much positive changes when considering matching of lenders and borrowers
Because of this, one would observe that in most cases, sellers encourage buyers to make purchases before making payments (because buyers lack funds at the moment), consequently giving rise to about 80% of transactions globally concluding their respective billing cycle in 30 to 90 days.
This implies that sellers also lack funds and as such, are compelled to secure loans from financial institutions, of course with business documents like invoices to be used as collateral.
In as much the speed of commerce and the high rise in sales is supported by this practice, you still find MSMEs toiling to obtain loans from financial institutions as a result of the unwillingness of these financial institutions to lend money to MSMEs due to stringent capital adequacy requirements implemented on financial institutions after the Global Financial Crisis.
To see the achievement of the Persistence mission, Persistence leverages some essential characteristics of the Blockchain/ Cryptocurrency ecosystem to achieve its mission:
➔ Decentralized Exchange — to further the effortlessness of transaction and exchange of ‘Real-world’ assets against crypto-assets.
➔ Debt marketplaces — bringing about the possibility of crypto-assets and Real-world assets to be used as collateral when borrowing/lending capital.
➔ Mobilization of capital — in a liberal, trustless, swift and continuous manner.
➔ Asset tokenization — by converting ‘Real-world’ Assets ranging from invoices to letters of credit and bills of lading (representing goods on a ship) into Non-Fungible Tokens (NFTs).
A real-word asset can stress-freely be used as a collateral for business funding as quickly as it has been tokenized into an NFT.
To be specific, the remedy which Persistence provides cannot be any clearer than it is. So many institutional capital and growing Stablecoins are looking for avenues to spawn profit, also, the necessity for MSMEs traders and businesses to obtain funding is increasing on an exponential scale and Persistence is perfectly suitable for both of them.
That being said, Persistence provides answers to the following problems:
- Underperformance in the Financial Services industry such as increased settlement times which has resulted to an annual expense of well over $10 Billion (due to this inefficiency) according to a BCG report commissioned by DTCC, inadequacy in transparency and requirement for trust resulting from by centralized exchanges failing to openly declare their holdings and end users being unable to verify ‘Proof-of-Solvency’ of a platform, insufficient infrastructure and access for MSME investors and businesses.
- Obstructions to the adoption of DeFi such as the use of strictly Crypto-assets as collateral when compared with traditional finance where ‘real-world’ assets like business documents such as Bills of Exchange (like invoices but for international trade), invoices, and Bills of Lading (document showing ownership of goods on a ship) are used as collateral to receive short-term loans. Meanwhile, Stablecoins in the Cryptocurrency ecosystem cannot be borrowed except when other Crypto-assets are used as collateral (usually to leverage up). Another obstruction is the insufficiency of infrastructure around holding Crypto-assets, one can easily observe that SME traders and businesses are not even close to or prepared to use Crypto-assets on a frequent basis because owning Crypto-assets is very necessary to be able to pay for gas, which of course, is likely to be highly variable and costly, and risk management strategy around multisig and private key management are complex. Data Privacy issue is another obstruction to the adoption of DeFi. When there is an inadequacy of strict SLAs around data access, exposure of data and availability of malicious activity, the adoption of DeFi becomes a tough decision for institutions to make. Beside, exposure of transactions and application logic plainly advances to obstructions for institutional adoption of Open Finance.
Persistence’s Answers; Persistence technology stack-
The Persistence architecture and technology stack was brought to existence, at the same time, observing the problems discussed in the section above and after various repetitions of attempting to solve them.
The Persistence technology stack comprises:
➔ Persistence chain(s) — a network of dominant business unequivocal ‘App-chains’ which accommodates security made available by the Persistence main-chain and its set of validators.
➔ Persistence SDK — a broad suite of plug-and-play modules or sectors to generate new or incorporate into existing Exchanges & Marketplaces or forums.
➔ Persistence dApp(s) — fund applications aimed at institutional and retail stakeholders.
It is a system that makes available the ultimate environments for Decentralized Institutional Finance Applications to be set up and executed and which promotes matching of lenders to borrowers.
The sovereign nature of the chains provides an environment for customizations with respect to speed against security and also calls attention to privacy deliberation speculation on the business demand. Likewise, the architecture enables dApps to execute independently without being flustered by hoisted transaction loads experienced by other dApps on the chain — this becomes obligatory in making an enjoyable end user experience available and achieve the expectations of institutional users.
The Persistence Software Development Kit (SDK) is a set of top-notch tools or ‘modules’ tasked with the modelling Marketplaces for stress-free transaction of value.
These modules can be embedded into existing applications. By preference, the modules can be utilized in diverse adjustments and mixtures to bring about entirely new marketplaces.
Open Finance dApps (mostly Exchanges & Marketplaces), aimed at pairing borrowers to lenders and investors, are supported on app-specific chains in the Persistence ecosystem.
These and more are solutions presented by the Persistence ecosystem. To learn more about the ins and outs of Persistence, click below: