Introducing the Digital Reserve Network — A Decentralized Microlending and Financial Services Platform

The Digital Reserve Network (DRN) is an open source peer-to-peer payment and lending network protocol that uses its own cryptocurrency – Denarii. The DRN Protocol is designed to create a sustainable model for financial inclusion while producing economic incentives for network stakeholders.

The DRN aims to incentivize financial literacy through learning-based rewards and the elimination of predatory lending practices within the network. Use cases such as Bitcoin and Ethereum have shown the potential to redefine the assumptions of our current economic institutions and existing financial systems. The Digital Reserve aims to be a part of the solution in redefining the World Economy through the establishment of a worldwide microfinance institution. Microfinance is currently a $100 billion dollar market that has grown greater than 15% per year over the past decade.

The Digital Reserve’s mission is to leverage decentralized network technology to create a sustainable microlending institution that innovates monetary policy within the cryptocurrency ecosystem. This will increase the accessibility of capital to more people and improve the lives of people where traditional financial institutions are failing. The Digital Reserve is a proof of stake distributed ledger and BlockDAG that requires stakers to commit funds for a defined period of time expressed through the Denarii Protocol.

The base currency of the Digital Reserve is Denarii. Stakers are rewarded by receiving transaction fees and the opportunity to mint new Denarii in accordance with the monetary policy. Funds committed by stakers will act as working asset through the Reserve which can be borrowed by users to fund activities they believe to have higher returns than staking. The activation of staked funds will reduce the on-chain token scarcity by introducing borrowers who can put the working assets to new work. Through the activation of staked tokens, the network will focus on economic productivity instead of deflationary value. It will also introduce pseudo-anonymous borrowing and financial accessibility to disadvantaged communities around the world. Integrations and partnerships with other services and offerings in the decentralized application ecosystem also represent a substantial value in ensuring the best practices are utilized.

Denarii Protocol

The Digital Reserve Foundations first product will be the implementation of the Denarii Protocol on the Digital Reserve Network. The Digital Reserve Network is a peer-to-peer distributed ledger, secured by cryptographic signatures, utilizing the Denarii token as its base currency. The protocol administering the Digital Reserve Network is the Denarii Protocol.

There are three important accounts that the Denarii Protocol governs: general pseudo anonymous accounts/ wallets, smart accounts and secured accounts through identity authentication.

Denarii Wallet

The Denarii Wallet is the most basic account available to users of the Digital Reserve Network. The Denarii wallet is a pseudo-anonymous accounts/wallet that enables users to participate in transactions with other users of the network. These transactions will be unrestricted and allow fast secure transactions anywhere in the world.

Denarii Wallet — Basic Account Features

• No overdraft or maintenance fees
• Elimination of Intermediaries
• Transaction confirmations in < 10 seconds.
• Asset Class recognition
• Recurring transactions
• Send Denarii to any Denarii Wallet connected email address

Denarii Vault

The Denarii Vault is the most comprehensive account available to users of the Digital Reserve Blockchain. Denarii Vaults are responsible for executing the lending protocol and the staking protocol. A Denarii Vault account enables users to participate in staking and a chance to increase their denarii holdings by competing for block rewards. Denarii Vault accounts also enables users to participate in the Digital Reserve BlockDAG lending pool.

Denarii Vault — Basic Account Features

• Basic Denarii Wallet Functionality
• Staking participation
• MicroLending
• Block Reward Payment

Denarii ID

The Denarii ID account is the last account type used in the Digital Reserve Network. These accounts are responsible connected to authenticated identities through a system of oracles and validating protocols. The purpose of these accounts are to have accounts/wallets that can be used to build credit reputation over time. This credit reputation or creditworthiness rating can then be used to access the Digital Reserve Blockchain’s (BlockDag) lending pool for short term micro financing from 1 wampum (1/10th of a denarii) to 20,000 denarii. These accounts can be created out of any pseudo-anonymous account and have all the benefits of the pseudo-anonymous accounts. The secured accounts/wallets will include a payment schedule, terms of the loan and access to best financial practices.

Denarii ID — Basic Account Features

• Basic Denarii Wallet functionality
• Borrowing
• Credit reputation
• Digital Identity

Real World Examples

Staker

John has been working a steady job for the past 6 years. He is listening to the news and hears that the price of his cable and milk is going up by 3% because of inflation. He then looks at his savings account and realizes he is only getting a .05% return. He decides this is unacceptable. He then hears about the Digital Reserve. It is registered with the proper authorities and currently has great returns because it cuts out the bank while providing microfinance opportunities to the disadvantaged. John realizes that this idea sounds really good. To be able to make a better return while also helping others. It is ideal. He decides to load the software on his tablet and buys some denarii on an exchange. Then he decides to stake 5% from his personal savings. A month later he checks on the progress of his accounts and realizes that he has had a 1.5% return in 1 month. This is 3x greater than what he received throughout the year. He also sees a message in his account from one of the borrowers thanking him for helping them be able to make feed their children while they were preparing to start their new job. He realizes, he is part of something new and important. He decides to move some more money to the Digital Reserve Blockchain (BlockDag) because it is worth it.

Borrower
Janus has been unemployed for 3 weeks since the factory she worked at closed. Her childhood friend tells her that he wants to make her a business partner in his new design business. He sends Janus all the materials, but they won’t get paid until the order is filled. Janus doesn’t have any credit history and has three children to feed. She can’t wait until the order is filled. She then sees a sign on the bus about the Digital Reserve, loans for those who need them the most. She decides to check the app store on her phones and finds the app in her language. She signs up and authenticates her account. 10 minutes later she borrows 5 denarii with a payback period of 3 weeks, more than enough time to get her orders filled. She then sees there is a search feature and finds a local market that takes denarii. There is also a message below that provides instructions for how to exchange denarii for cash if necessary. She buys some rice, eggs and beans and walks home.
3 weeks later she pays back the loan, leaves a message and gets a notification that her credit rank has increased and short video on ways others use their Denarii. She then realizes, that she can use the Digital Reserve to buy additional materials while building her credit.

If you want to know more and get involved, please join the Digital Reserve Network mailing list and give a shout on Twitter. We are looking for continued input because this is meant to be designed together

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