KarmaToken Cryptocurrency Blockchain Platform: what is this?

KarmaToken Cryptocurrency Blockchain Platform: what is this?

in Cryptocurrency, Know-it-all, Altcoins
Karma is a P2P platform for creating socio-economic relationships between people, regardless of location, around the world. In many countries, $100 USD is a large amount of money that can change the lives of several people and give a much-needed boost to their creativity and the development of their business. In other countries, $100 USD is a cheque for dinner in a restaurant or even a treatment at a beauty salon. The task of Karma is to create an ecosystem with a rich variety of relations between participants. People will have the opportunity to exchange their available resources directly with other people, with and without interest, for a period of time to be determined by peers. Any participant can play any role: investor, borrower, guarantor, lawyer, auditor, or seller. Due to the open market, people can choose which types of economic and social relationships are better suited to different situations. Due to direct interaction, people will enjoy the benefits of transparency coupled with high-speed transactions. Karma is created to simplify the exchange of resources and finances, accelerate the development of the economy and unite clusters of mutual trust around the world.  

Evolution of the financial sector

18th-20th Centuries

Historically, banks have played a connecting role between investors and borrowers. Investors lent money to the bank, and the bank gave out loans at a higher rate, providing a revenue stream for the bank. Investors and borrowers did not interact directly because investors did not have enough competencies. 
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Therefore, they delegated this to the banks:
  • legalization of credit relations;
  • assessment of borrower’s financial position
  • return of funds in case of default
The disadvantages of such a scheme are obvious, and centralization in the form of banks has led to the fact that the world's finances are distributed unevenly. 1% of the population owns more than 90% of the resources, and billions of people have almost no access to financing or banking in its simplest forms. In addition, about 20 to 30% of the GDP is spent on banks and insurance companies, while the salaries of top-managers of the financial sector are millions of dollars per year.    

21st Century

P2P platforms first appeared in the 21st century. The main idea is to make the direct interaction between the investor and the borrower possible. The volume of the P2P lending market began to grow rapidly because people responded positively to the new model.
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  1. there was the first step towards the decentralization of financial services. Each investor used his firsthand experiences, knowledge, and competencies to make decisions about investing in a particular business.
  2. banks are very limited by governmental legislation. Therefore, the issuing of loans is often reduced to seeking loan applications that meet the requirements of the regulator.
  3. the speed of decision-making. The process of obtaining a loan from a bank can take anywhere from several weeks to several months.
  4. its effectiveness. In many banks, very old methods of working with a high degree of manual labor are still being used. This greatly affects both the speed of decision-making, and the quality of the analysis of borrowers' solvency.

Future


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With all the advantages of P2P-credit platforms, there are also a number of disadvantages:
  1. In most cases, they are closed inside one country.
  2. Participants of the platform can play either the role of an investor or a borrower. All other roles are centralized and non-transparent.
  3. A limited set of assets that can be left as collateral or on credit.
The Karma project creates a new level in the development of the financial sphere: an open community for the creation of social and economic relations. Any existing financial institution, cooperative or P2P-lending platform can become a part of this ecosystem too. The following bullet points are the main areas of development in Karma’s P2P platform:
  • Development of cross-border capital exchanges.
  • Establishment of networked communities
  • Creating an open market for access to funding.
 

The main features of Karma

Decentralization of roles

In Karma, each participant can play any role: borrower, investor, insurer, guarantor, collector, portfolio manager, lawyer, or any of the roles which will appear in the ecosystem in the future. Every user has a ‘Karma’ rating, and over time, people will seek out partners with higher ratings. In the beginning, Karma will independently perform a number of roles and will be one of the key players in the ecosystem. At the same time, Karma’s main task is to delegate these roles to the community members. Karma gives freedom of action in choosing and creating roles. Here are the main roles at the start of the project.

Investors:

  • Can select loan applications of interest or submit their own prospectus/portfolios for individuals or companies looking for investment.
  • Can be pooled to co-finance projects.
  • Motivation:
  • Earn money financing interesting projects.
  • Fulfill a social mission, giving resources to people and companies on preferential terms.
  • The investor submits an application aimed at potential loan applicants defining a number of parameters: the interest rate on the loan (from 0 to N), the desired level of collateral (from zero to N), the type and size of provided resource (crypto asset, fiat currency, security etc.), the loan due date (from 1 week to the ‘back when you can’ format), and more.

Lenders

  • Can apply for a resource request and accept applications to provide investment.
  • Motivation:
  • Implement projects
  • Develop businesses
  • The lender applies for money.

Guarantors

  • Increase the probability of a successful loan repayment.
  • They can connect to transactions and vouch for the lender with their property.
  • Motivation:
  • Get a reward for a surety
  • Social mission (bail for close people).
  • Improved reputation and bonus in the event of a successful loan repayment.

Scoring agents

  • Provide tools for scoring borrower applications.
  • They can provide their scoring by any parameters they find appropriate, based on their mathematical model or expert opinion.
  • Motivation:
  • small fixed payment for the calculation of data;
  • % of the transaction in case of successful loan repayment;
  • % in case of default;
  • % in case of loan transfer to collectors.
  • Minuses are calculated from scoring agent tokens. If the agency has zero tokens left, it loses its status until it replenishes the deposit.
  • Pros/cons of Karma are similar to the pluses/minuses of tokens.
  • Payment of scoring agents motivation is taken equally from the investor and the lender: the investor is underpaid, and the borrower overcharges.
  • Mechanism:
  • The borrower can choose the scoring of interest (or several), and ask them for scoring their application. This will increase the application attractiveness for investors.
  • The investor can order additional scoring.
  • Karma will independently develop its own scoring, and connect independent appraiser-partners.
  • Importantly, a scoring agent can act as a person and the program that connects to Karma by API.
 

Token Sale

Start: November 27, 2017. Finish: either by reaching Hard Cap or by reaching December 22, 2017. Soft Cap: 5M USD. Hard Cap: 10M USD. Price of the token: 0.01 USD. The number of tokens produced at ITO: 3 billion. Of these, for sale: 1.275 billion.  

Karma token Features

  • Decentralized Roles

At Karma ecosystem anyone can play any role: involve new members, escrow, transaction transport, analytics, scoring, underwriting, insurance, currency exchange hedging, lawyers etc. Each community member earns money and reputation for useful actions: involving new investor or good borrower, hi-quality scoring, asset management, analytics, insurance etc.
  • Decentralized Interchange Rules

At Karma investors give their money directly to borrowers. Community members can offer any loan conditions: with collateral or without it, with interest rate or without it, with mandatory repayment or without it. Open market and a high number of bids will speed up the evolution. People will choose the best types of relationships for different situations by themselves.
  • Decentralized Location

Effective SME owner from Latin America can attract money from Swiss investor, who has a negative deposit interest rate in his country. The ecosystem of thousands of hedge funds and currency exchange risk insurers will be in a competition to create the best option for risk minimization. Local lawyers provide correct e-contracts. Local agents provide debt recovery.
  • Different Types of Collateral

Cryptocurrencies and tokens, via bitShares technology. Real Estate. There's already an API in Russia, Sweden, Saudi Arabia and Ukraine and there'll be more. Goods and services. Automatic p2p-factoring has already existed. Gold and other digitalized assets: Digix, ChronoBank, BankEx. Every debt is transferable and splittable.A loan can be provided in fiat currencies via banking API and automatic payment commentaries analysis. After the statistics accumulation: loans issued in internal Karma tokens. A huge step to barter direct interchange economy.
  • Decentralized Data and App

Due to blockchain technology Karma doesn't rely on single server or hosting provider and can provide sustainable service. The data is securely stored in a decentralized network. Karma app is decentralized too and executes on different servers. Anyone can connect the server to the Karma delegates' network and earn money storing and processing data.
  • Total Automation

All interaction processes in the ecosystem are automated as much as possible and don't require a physical presence: electronic loan and surety contracts, reassignment of obligations, collective claims, collateral registration and release, currency exchange risk insurance. Loan approval time is as low as possible, and the loan itself is easy-to-use for borrowers: semi-automated scoring, one escrow account for bulk repayments for all investors, payment auto-split to multiple investors via smart-contract.
  • Smart Scoring

Automated scoring: Big Data, Machine learning. Scoring based on reputation accumulated after several successfully completed contracts. Social networks attached, online commercial data attached (Shopify, Etsy, Amazon, Ali, Spark). API for external scoring algorithms. Regular online re-scoring: control over actual borrowers' KPIs. Lots of hackathons for developing new scoring algorithms. Social-responsible ecological scoring: If someone hasn't passed the scoring at a traditional bank, he's just get refused. In Karma he gets the tips on how to grow his score, he also gets the mentors list and special education courses.
  • Mutual Responsibility

Each participant of the transaction commits with his money and reputation. We create a strong community based on mutual responsibility. If somebody fulfilled the obligation, his Karma is growing up. If he failed —it goes down. Also, Karma changes for everyone involved in the contract: who brought the borrower into the ecosystem, who suited for him, who scored his quote as positive.
  • Business Development

A powerful tool for ecosystem growth. Goods and services manufacturers can easily involve their loyal customers as investors in the growth of their business. If someone loves the goods they can crowdfund the manufacturer. Karma itself is not only a financial market. It creates opportunities to promote manufacturers worldwide, involves new distributors, and move to the new markets.
  • Loans For Future Delivery

One can sell his goods or services today and deliver them later. It's like a forward contract, for example: to crowdfund real estate construction at the early stages (day-usage-tokens instead of square meters), agricultural businesses to crowdfund their harvesting (potato-tokens), for air tickets or tours presales. Profitable for investors: significant discounts, or re-selling tokens at the exchange for profit. Profitable for manufacturers: make money today, make turnover faster, promote his own goods and services, payments with his own goods and services. This is a foundation for the barter economy like Swiss WIR.  

KarmaToken Market Capitalization


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KarmaToken Team


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