Recently, many projects to facilitate financial commodity trading using cryptocurrency are appearing.
In this issue, we will introduce Versara , a project aiding in corporate cash procurement in the field called trade finance related to the exchange of the seller and the buyer of the product.
In Versara, you can invest either Fiat money or cryptocurrency in speculation to finance cash to a company called factoring.
In this article, I will explain the detailed mechanism of Versara, the ecosystem, comparison with similar projects from the beginning in an easy to understand and thorough manner.
What is the Versara project?
Versara is a service that mediates a service called factoring, in which a company sells accounts receivable at a discount price to obtain cash.
It is the Fiat investor who provides this cash with interest and the role of cryptocurrency investor to provide collateral in cryptocurrency in preparation for default (accounts receivable not yet paid).
Let’s take a closer look at each of these roles and the structure of the project.
Factoring to instantly convert accounts receivable into cash
Before going into the details of the project, let’s keep in mind something about accounts receivable and factoring .
Let’s assume that company A (seller) has sold 10 machines of 100,000 yen per machine to company B (buyer). Company A has obtained 1 million yen accounts receivable (Accounts Receivable) due to the sale of the machine.
Accounts receivable refers to the money paid by company B on the payment date determined by the contract, not the money that company A currently has in hand .
Here, it is assumed that company A will necessarily need cash by now for the development and operation of a new project.
Company A can now obtain cash by selling the accounts receivable earned from the transaction with company B earlier. In this way, the method of selling accounts receivable and getting cash is called factoring .
Normally, the proceeds from this sale will be lower than the accounts receivable itself. This discount rate is greatly influenced by credit information of the accounts receivable payee (company B).
A company that provides cash to companies for a discounted purchase of accounts receivable is called a factoring company. Versara is also a project to deploy such services.
Versara can invest in both Fiat and cryptocurrency
The unique point of Versara is adding goodness of both Fiat and cryptocurrency to factoring service.
Adding collateral for cryptocurrency to Fiat’s lending allows Versara to benefit not only sellers and buyers of products related to accounts receivable but also Fiat and cryptocurrency investors.
The role of Fiat investors
Fiat money invested by Fiat investors (mainly institutional investors) will be saved in the Versara fund pool. This fund will be provided in exchange for purchase of accounts receivable to company A, etc. in the preceding example.
When selling the accounts receivable to Versara, the buyer of the goods (company B) needs to certify its validity, and this buyer also scrutinizes the credit information through external credit institutions etc.
Accounts payable to Versara will be paid from the buyer of the goods at the due date, and Versara will pay the principal and interest to the Fiat investor based on the funds.
The role of cryptocurrency investors
If the buyer of the item (Company B) can not pay the accounts receivable, Versara will not be able to pay principal and interest to the Fiat investor.
In order to prevent such a situation, it is the cryptocurrency investor that is responsible for securing part of the purchased accounts receivable with cryptocurrency .
This allows Versara to convert the collateralized cryptocurrency into Fiat and repay it to Fiat investors when the buyer of the item can not pay the accounts receivable.
Of course, instead of taking this risk to the cryptocurrency investor side a corresponding return will be paid .
Versara’s credit enhancement measures are “double wall”
To summarize so far, the flow of financing Fiat investors in exchange for accounts receivable for companies wishing to raise cash is the basis of Versara’s service.
However, there is a possibility that some persons who will not be able to pay (default) will appear in this accounts receivable payer (company B).
In Versara, ” double wall ” is prepared as a credit enhancement measure so that funds can be repayed to Fiat investor even at such a default time.
cryptocurrency collateral by pool
As explained in the previous section, Versara can get a return by providing cryptocurrency as collateral .
This cryptocurrency is decided to cover 10% to 20% of each pool (group of accounts receivable), and if the payee’s default is raised, this collateral will be repaid to the Fiat investor It is.
Reserve the entire platform
If large defaults occur and the collateral of the cryptocurrency is exhausted, it is the reserve for the whole platform to function as the second wall .
This is a saving consisting of the commission (VXR token) collected at the time of trade accounts receivable, and unlike cryptocurrency collateral, it is not linked to a specific pool.
In this way, Versara strengthens the credibility of the service by setting the default countermeasure in two stages.
Small and medium size enterprises in emerging economies and so on can also factor
According to Versara, in emerging economic countries, mainly in the Asian region, banks are small in scale and multinational business is not actively popular, so it is said that small and medium-sized enterprises , among others, can not factor .
Versara, which is planning to deal with various Fiat / virtual currencies, is expected to be able to give such small and medium enterprises the opportunity to conduct trade finance by expanding services globally.
Comparison with similar project
Versara cites We.Trade, Marco Polo, Finacle Trade Connect, etc. as similar projects.
Both are developing trade finance services that apply block chains, but there are many things in the early stages of the development stage.
Every project is basically a project for institutional investors.
|name||Versara||We.Trade||Marco Polo||Finacle Trade Connect|
|Overview||Factoring intermediary service||Trade finance in general||Trade finance in general||Trade finance in general|
|Characteristic||Credit enhancement measures using cryptocurrency||Partnership with nine European banks||Industry integration using block chains||B2C · B2B cover both trade|
As is also recommended to the official, the service of Versara has become to those that focus only in the field of specific compared to those of other companies (factoring brokerage).
According to the white paper, Versara’s vision is to have other companies use the “double wall” credit enhancement measures and to coexist with each other .
Points to note about the Versara project
It is the Versara project that enables us to expand factoring service globally and participate in investment from both Fiat and cryptocurrency, but here are a couple of points to note.
Basically only institutional investors can invest in Fiat
Since there are many large speculations in trade finance, basically it is possible for only large investors such as financial institutions to invest.
This is the same for other projects introduced in the section on comparing similar projects.
The VXR token is a security token
VXR token (Varsala token) is a token paid as compensation for guarantee fee (return) to the cryptocurrency investor and accounts receivable for the product buyer (company B) .
Also, a portion of the fee incurred when the accounts receivable is sold is converted to a VXR token and saved in the reserve of the platform.
The VXR token is not used for service use etc, but is simply a security token with value storage aspect and investment usefulness .
Also, you should be aware that VXR tokens are based on Stellar rather than ERC tokens.
There is no particular mention of affiliation information etc. regarding external credit institutions
In Versara, it is said that KYC and credit scoring of accounts receivable payer are entrusted to external organizations, but the names of institutions that concretely have partnership here are not disclosed.
Let’s also check the roadmap of the Versara project.
|October 2017||Founding of Versara|
|May 2018||Publish service prototype|
|July 2018||Implementation of ICO|
|First quarter of 2019||Platform launch in the US|
|2 nd quarter of 2019||Platform launch in the Asian region|
|Third quarter of 2019||Platform launch in the European region|
May 2018: Service prototype release
In this prototype, in addition to issuing smart contracts, tracking functions of cash flow and logistics, it is said that it will become possible to receive payment of accounts receivable.
Versara is introducing this service by presenting a number of presentations and coverage since June.
July 2018: ICO implementation
The public sale of the token is said to start from July this year.
In addition, Air Drop etc. are carried out in Versara.
2019 ~: Platform launch
Versara will start services from its home base, the United States, and will continue to advance into the Asian region and the European region later.
Versara is expected to become a big opportunity to expand business, especially because there are many small and medium enterprises that can not factor in the Asian region.
In this article, we introduced a project · Versara that globally develops factoring services and gives opportunities for financing small and medium enterprises in emerging countries.
In addition to investing in Fiat, credit enhancement measures with the cryptocurrency as collateral are very new, I think.
Those who are interested in this project, please check out the website etc!
Author: Yuya 【Coin Desk News】 – Source Post: https://crypto-times.jp/versara-trade/
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