Yes, We Created A More Sustainable and Equitable Currency With Denarii

Over the past 6 months, the Digital Reserve team has analyzed various approaches to increasing financial access. We looked into the spectacular work of Nobel Prize Winner Muhammad Yunus and the various theories around financial empowerment. We also started to investigate the various fintech solutions to financial inquities. We were impressed and inspired by the work of Juvo , Insikt, Inc. and Viola Llewellyn of Ovamba , True Accord and Kiva to name a few. As leaders in their respective spaces, we saw the opportunity take the next step in their work with a product owned by its users, global by design and responsive to market conditions.

Therefore, we are thrilled to announce the Digital Reserve’s vision to create a scalable and sustainable solution through leveraging an incentive based cryptocurrency. We can become the decentralized platform of financial services that empowers disenfranchised communities while still maintaining profitability for users within the network.

How did we combine blockchain/cryptocurrency with social impact?


It is all about the balancing of incentives. Cryptocurrencies based on Bitcoin in their simplest form are a series of redundant ledgers with a very rigid monetary system based around an explicit cap. These ledgers are updated based on a few simple rules and underlying assumptions.

• Transactions must be broadcasted to be included
  Transactions are checked against the ledger and validated/invalidated
  Blocks are created from transactions
  Blocks are checked for validity
  A reward is given to block creators who send valid blocks and meets the submission criteria
  The block becomes the foundation for the next block

This fundamental structure is the basis of blockchain. However, it is powered by the desire of users to have their transactions accepted and block creators (miners) to win a reward for facilitating those transaction. This basic incentive system thrives under the deflationary systems which are the status quo within most cryptocurrencies.

The solution was revealed within a lot of the academic and practical work around Proof of Stake. Proof of Stake is a system of validating transactions where the reward is given to those who use their funds as collateral to demonstrate their intent of honesty. Currently, these implementations just have the funds sit in a bonded status. This decision further places deflationary pressure and removes capital from circulation. For all intents and purposes the money is buried.


https://www.youtube.com/watch?v=CTcPlYSSp7A

Within most monetary systems, which tend to be inflationary, buried money is foolish. It is foolish because the value of each unit decreases in purchasing power over time. However, within many cryptocurrencies the value of each unit should increase because new value accrues to the current holder. This is great on the short term, but in the long term it leads to stagnation of the economic system.

Therefore, there is an economic benefit to making the bonded / collateralized funds available for lending without collateral. However, you then have to deal with defaults on those loans, so a reserve system is necessary. Within the Digital Reserve Network, this reserve is created through our cost-based Proof of Stake System. We apply a cost because one of the weaknesses of Proof of Stake(POS) is called nothing at stake. Vitalik Buterin calls out this issue in one of his early blogs on POS systems. Applying a cost within our system allows us to create an incentive for people to minimize their broadcasting of transactions to only the relevant and accurate information instead of risking their funds.

So if you are reading carefully, at this point we have now created a system to provide collateral free lending. To take our work to the next step we also included a borrow centric auction system for underwriting. What this means is that borrowers are able to bid on loans in a way that reflects their financial capabilities.


https://westagilelabs.github.io/tdr.github.io/dashboard_component/dashboard.html#
This empowers the user and also creates a system to develop financial literacy through the process while mitigating predatory lending and interest rates they don’t feel comfortable.

The final piece of this puzzle that really solidifies the balance of incentives and crypto-economic system is that the monetary policy is not a deflationary system like Bitcoin. Through the adoption of machine learning processes and interest feedback rules, we are able to create a controlled monetary supply that reflects market conditions. This is important because it allows investment to accrue to those actively participating in the network.

So yes, through intentional design, we have managed to craft a cryptocurrency that will be accessible to communities around the word and ripe for mass adoption. So while Bitcoin has a date set on its viability, we are building a currency that can grow with its user and change the world for the better, while still being profitable.

If you are interested in being a part of redefining how people interact with money and making the world a little better, check out the website www.thedigitalreserve.org

A Solution to Eliminate Predatory Loans and Payday Lending Opens For Global Investment
The Digital Reserve P.B.C. is initiating a $2 million USD debt offering (Token DPA - Tokens as a Debt Payable Asset) solely to accredited investors under Rule 506(c) of Regulation D promulgated by the SEC under the Securities Act. The Company will use the proceeds of the offering to develop the first debt-based cryptocurrency network - the Digital Reserve Network (DRN). The DRN is a peer-to-peer payment system that relies on sustainable lending, collateral-free borrowing and a responsive monetary policy.

The DRN is the brainchild of seasoned blockchain entrepreneur Jomari Peterson who started the Company with Joshua Rittenberg a former V100 lawyer.  The mission is to build a system that could provide financial accessibility for the $2 Trillion dollars in unmet financing need, while creating an equitable playing field for disadvantaged and disenfranchised communities..

The proposed DRN design is informed by a few significant design principles:

• The establishment of a system where doing good is profitable
  A sustainable economically sound system
  Minimization of environmental impact through proof of stake
  Long term security through integration of Quantum Resistance
  Global Access

The result is a peer-to-peer payment system that relies on sustainable lending, collateral free borrowing and a responsive monetary policy to stabilize value.
https://www.youtube.com/embed/d3rPK-l_luo

I believe The mainstream consumer and individual is eager for a solution to better returns or financial accessibility, while currently trying a variety of risky and costly projects and solutions. We've designed the Digital Reserve Network to be easily accessible with an easy to understand interface with a focus on developing easy on-ramps and off-ramps. For the first time, users, lenders and borrowers alike can participate in an innovative solution that empowers them and each other. They can create a healthier economic system, develop layered solutions upon the platform and create a global community that is beneficial to everyone. After intense development and review, we can't wait to share with the global community and have them nurture this unique solution with us.

The Company will be leveraging the newly minted Token DPA to conduct its debt offering: "The Token DPA is an innovative financial instrument developed by the team over at Republic Crypto. It's debt-based, just like our system and was designed to be far more investor friendly than the ubiquitous SAFT agreement," notes Joshua Rittenberg, my Co-founder.

The Digital Reserve, P.B C. Is conducting this debt offering, with principal plus 50% interest payable by Tokens (Denarii) in lieu of cash.  The launch of the Digital Reserve Network (DRN) will generate an initial supply of 6 Billion DRN Tokens, called Denarii. 300 Million Denarii will be allotted for purchasers of the Token DPA (Debt Payable by Asset). The offering of the Token DPA on July 23rd, is an alternative to the SAFT (Simple Agreement for Future Tokens), which offers limited to nil protections if the project is never completed

"With the Digital Reserve Network, borrowers will be empowered to determine their own interest rates and repayment periods in the process of developing their financial literacy"
-CEO, Jomari Peterson

https://www.youtube.com/embed/jmbs6tRx_ag

The Token DPA is a debt instrument, which is in alignment with the network protocols. By lending money, the offering participants take priority in the case of bankruptcy or dissolution over equity and SAFT holders, in most cases. In addition, the loan gains interest. This allows early supporters to receive all the benefits of supporting the work with more downside protections.

For more information visit the thedigitalreserve.org to read the whitepaper and join the newsletter.

About The Digital Reserve:

The Digital Reserve, P.B.C. is a software development company focused on fintech solutions for social impact. Founders Jomari Peterson, Carnegie Mellon Engineering & Public Policy PhD Candidate and Serial Entrepreneur, and co-founder Joshua Rittenberg, with a rich legal history, lead the team.  Black Engineer of the Year Amina Emenena, PhD Candidate Emmanuel Johnson, and Econometrist/Data Scientist Troy Wiipongwii lead technical development. As a passionate group with over a two decades of experience in software and business development, they joined forces with a vision to create a better world profitably. They wanted to design a world where simplicity, equity and openness were first. With a rich history in the space and a laundry list of innovations, the team is building the a cryptocurrency that could be widely adopted by users worldwide. Join us on Telegram: t.me/digitalreserve and Twitter: @digitalreserve

The Digital Reserve Network is expected to launch May 2019.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such statement or other jurisdiction.

Forward-Looking Statements

Certain statements in this announcement, including statements regarding the proposed offering of the Notes and The Digital Reserve, P.B.C.'s intended use for the proceeds of the offering, are "forward-looking statements" that are subject to risks and uncertainties. These forward-looking statements are based on management's current expectations, and as a result of certain risks and uncertainties, actual events or results may differ materially from those contained in the forward-looking statements, including those factors set forth in The Digital Reserve, P.B.C.'s public filings. These documents contain and identify important factors that could cause the actual results for The Digital Reserve, P.B.C. on a consolidated basis to differ materially from those contained in The Digital Reserve, P.B.C.'s forward-looking statements. This list of factors is not intended to be exhaustive. Such forward-looking statements only speak as of the date of this announcement, and The Digital Reserve, P.B.C. disclaims any obligation to update information contained in these forward-looking statements.

My team of 5 is currently working on a cryptocurrency designed to help close the $2 Trillion gap in unmet financing needs worldwide and auxiliary services. As the CEO of the Digital Reserve, I am focused on being part of the establishment of new financial institutions. Our team is developing a decentralized financial services network built around Denarii - a specialized cryptocurrency designed for the needs of everyday people. We have already started onboarding partners, including a United Nations Capital Development Fund sponsored credit union in Liberia. We are currently in the early stage investment phase as we continue to build the network and our client base.

We are excited about our continual progress. Check out our most recent Youtube video: Meet Luke which introduces the simplified process for borrowing we are introducing.


We also have released a simplified primer to provide a lower barrier of entry and more direct introduction to the Digital Reserve Network's Denarii.

https://www.slideshare.net/JomariPeterson/the-digital-reserve-denarii-primer


Also, watch the Medium Blog for new details on network design, partnerships, operational reports and thought pieces.

If you want to talk and discuss, join the telegram group. t.me/digitalreserve

https://eprint.iacr.org/2018/104.pdf



The Digital Reserve is closely watching this development for use in its implementation.

I am excited about IOTA, UPort, CIVIC and other organizations support and participation in the Decentralized Identity Foundation.

I express my thoughts and it's importance to the The Digital Reserve in my blog . I also provide information on the working groups that are currently available. There are four at the moment.

https://medium.com/@jomari.peterson/the-decentralized-identity-foundation-best-practices-in-development-94d56880afab

I concur with you. I am working on something exactly like this except it will not be in Bitcoin because I believe the monetary supply should be response to the market conditions.

I find the fractional reserve system to be appropriate for a system with regulated monetary supply, but debt being offered within some level of acceptable tolerance for default. I personally have been working on a system that uses a 100% reserve initially, but offers the ability to have various tiers.

I think the power of these cryptocurrency networks is that they establish the rules that guide the direction of utilization and aggregrate those who share those common values. Therefore, I do believe Fractional Reserve Lending is not necessarily bad, but it is often abused. However, within a cryptocurrency system, it is possible to design where the inflation rate is capped and lending represents a strict percentage of the monetary supply in accordance with the volatility and some margin of error.

The downside is increased competition for eligible funds.

These are the basic concepts supporting my work with the Digital Reserve.

I definitely appreciate the read. And I totally agree, the endgame issue is definitely significant. Especially with potential collusion by multiple parties.

This is why the combination of a reserve system and a macro approach is important. If a system is designed that maximizes the entire networks return over a period, then once a certain point is reached defaults could have a potentially negligible impact. For example if the endgame is around 7k units and the total return through increased network productivity and interest payments was 7.2k then the net impact on the chain economics would be positive. Especially if you consider increased circulation and utilization as important to the network.

There are some assumptions that have to be made about how people behave, but with responsive parameters and considerations, it is difficult but possible. This is what I am working on with the Digital Reserve team. We are working to bring: this concept to fruition: an on-chain uncollateralized approach to scalable microlending as a base protocol. The base protocol will use a 100% reserve system initially, but the ability to operate varying reserve levels will be an option for those who are more risk tolerant. This is meant to provide a foundation for more advanced financial products that increase financial inclusion while maintaining profitability.But it is a tightrope game, that is why I am very interested in the thoughts and perspective of others.

Introducing the Digital Reserve a Decentralized Financial Institution to empower and increase onchain economic productivity and provide financial inclusion.

Personally, I believe POS

Over the past few years I have been really trying to find a project that could serve the world in a sustainable way. Organizations and institution are able to outlive their creators when built on solid principles and mutual benefits.
 
I found this within cryptocurrencies like Bitcoin. The fundamental service they provide is a medium of consensus among disparate communities with monetary incentives.

However, while a lot of focus is being put on the technology, there is not enough focus on how this can empower the most disadvantaged communities and the economic systems that bind them. That is what the Digital Reserve is about. We are creating a sustainable system that mitigates discrimination in lending and provides a elective economic system. This is designed to be maximize the win-win scenario for those willing to join together in a common enterprise to empower themselves and others.

We are working on creating a sustainable decentralized financial institution that values financial inclusion.

 This is a really ambitious project and it requires help from those who believe in the mission: the creation of an economic system that empowers people regardless of location.

The document I shared below is a technical outline of the system. If you want to read a high level business plan for operational details, please message me.

Whitepaper Version 1


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The issue to me is that Bitcoin is not readily accessible as a way to reflect market trends and productivity. People squeeze new value of of existing resources and will increase productivity to unlock previously unseen value. So while it is a good store of value bit doesn't suitably reflect the  work of people. This is why I have an interest in scalable lending as a part of the base protocol. It is an internal system to push people to maximize the efficiency of their goods and resources.

This is where the conversation about inflation becomes important. How do you introduce scalable and sustainable lending. Especially with Fiascos like bitconnect clouding the waters.   

Thus, I am curious what peoples perspective is on anonymous and pseudo-anonymous lending.  There have been some attempts to answer this question in the market, but none were truly scalable systems.  What are your thoughts.?

Based on my research, I believe there are three big hurdles to overcome:

• Adverse Selection
• End-Game Issues
• Market Fit

and there is also the additional issue of the risk premium that can be associate with it.  This risk premium is expressed in the interest rate on addition to the typical inflation rate.

I believe it can be done and I outline my theory in the link below. I would love to discuss this seemingly very difficult question. I personally am very interested in this question because it is a way to empower people financially on a global scale. I think if done right it could completely change the game.

https://medium.com/the-digital-reserve/designing-sustainable-pseudo-anonymous-lending-a9350e1dceeb

Given that there is $2 Trillion Dollars in unmet financing need and the microfinance industry is $100 Billion dollars and grows 15% per year approximately. This means that there are billions of people with low or non-existent credit histories who would benefit from access to financing. These financing range from the extra income to survive until a job starts to assistance with cash flow for a cash strapped business. The needs are varied and while collateral matters, there needs to be option for those who need a space to access credit who don’t have the resources to use leveraged debt.

Thus, I am curious what peoples perspective is on anonymous and pseudo-anonymous lending.  There have been some attempts to answer this question in the market, but none were truly scalable systems.  What are your thoughts.

Based on my research, I believe there are three big hurdles to overcome:

• Adverse Selection
• End-Game Issues
• Market Fit

and there is also the additional issue of the risk premium that can be associate with it.

However, I believe it can be done and I outline my theory in the link below. I would love to discuss this seemingly very difficult question. I personally am very interested in this question because it is a way to empower people financially on a global scale. I think if done right it could completely change the game.

https://medium.com/the-digital-reserve/designing-sustainable-pseudo-anonymous-lending-a9350e1dceeb