Blockchain technology is opening up new worlds of possibilities for secure, transparent financial transactions. As cryptocurrencies continue to gain legitimacy as an asset class, the idea of holding and spending them for both more common and substantial financial dealings is beginning to take hold in the mainstream.
However, as crypto holders attempt to leverage their assets from the blockchain to the “real world,” a wide array of risks and pitfalls present themselves. For those who would like to borrow against their crypto assets for fiat currencies, the volatility of the crypto market and lack of trustworthy intermediaries can leave those involved vulnerable to a host of threats.
Designed to address these issues, Vena Network is an open source project meant to fill in this gap in the cryptocurrency ecosystem. The objective of VENA Network is to establish a decentralized collateral loan and OTC trade network based on VENA protocol, where individuals can conduct transactions between cryptocurrency and fiat currency and collateral loans without the need of third parties. VENA Network aims to allow more individuals to benefit from the cryptocurrency trade, while mitigating the risks posed by cryptocurrency price fluctuation and unreliable traders.
Tremendous “growth space”
As the financial ecosystems of fiat currencies and cryptocurrencies become increasingly intertwined, many analysts are predicting that cryptocurrency collateral loans will skyrocket in popularity, and Vena Network is betting on that.
“I’m extremely optimistic about the future of cryptocurrency collateral loans,” explained Vena Network CEO Zhu Qing at a recent event. “(The loans) can attract funds from traditional P2P asset management... there is still great growth space in the cryptocurrency market, and a lot of resources have not yet entered this sector. We are really only at the very earliest stages of this, so it is full of opportunities and challenges.”
How Vena works: highly generic, working with any blockchain network
Vena Protocol is an open source protocol based on the blockchain, in which the highly generic architecture enables users to write contract terms to define rules for a series of decentralized financial activities including asset issuance, lending, trading. Users can retain copyrights, which Vena believes will lead to a natural outgrowth of a trading market for smart contract templates in Vena Network. VENA protocol guarantees that the underlying interface can be freely defined, while providing a contract standard library including debt class (debt financing, credit, collateral loan) and transaction class, helping users build an interactive, fast, convenient and secure Financial DApp (Decentralized Application).
The protocol itself is a set of design and description specifications that is compatible with any blockchain network that supports smart contract platforms and breaks through the “Information Island Predicament” via cross-chain technology which, according to the Vena team, will fully allow the protocol ecosystem to prosper.
Governance and impartiality
“From its inception, Vena Network fully absorbed the principles of market competition, resource composition and distribution,” explained a company representative. This covers the methods of compensation of different roles in the Vena Network and the value-added collateral of NFT (non fungible tokens) asset portfolio and etc., improving operability for the lending and trading activities built on the protocol. At the same time, the establishment of fiat-to-cryptocurrency exchange channel gives rise to a decentralized jury network for arbitrating off-chain trade disputes, and uses VENA token as an economic incentive to guarantee the fairness of the network.
VENA Network guarantees that they will have zero partiality towards any party of the protocol, and no fees are to be charged by the protocol itself. According to their plan, A Decentralized Autonomous Organization (DAO) will be responsible for upgrading, safety and compatibility of the protocol, while the ENS to the contract address mapping will make access and upgrade to smart contracts accessible and user-friendly. In essence, VENA Network aims to build an open standard and cornerstone for a global digital asset financing and exchange network.
The team, the funders, and what’s next
The project is based in Chengdu, China, with total 18 team members. The product development team is composed of 11 people in total, including the senior blockchain engineer Jeremy Lan, a PhD from NUS blockchain lab, contributors from R3 Corda Ledger, and an operations team in Singapore. Investors include LD Capital, Homerun Capital, Phoneixfin Fund, Mars Financial Ecological Investment Fund, Higgs Capital, BlockChain Fund (Australia), Newdo Venture, Byte Capital, Future Global Capital, Fireblue Capital and VRF Capital.
VENA Network completed its cornerstone funding in late June and the project is currently in development. Vena’s first cryptocurrency collateral loan super node is expected to be launched at the end of July and VENA Network will have a global meetup on the 24th of July. Its private sale financing round will be carried out after the first-generation product is launched.