Inspiration
Distributed networks are great for doing two things in particular: ensuring trust and minimizing risk. These two qualities are largely apparent in crowdfunded investment services, like crowdfunder.com, or prosper. In the status quo, these services tend to serve those seeking investment much more than the investors themselves. Placing your funds in someone else's hands with little else than a website is by nature a risky proposition, and we think the blockchain can solve it.
We plan on changing the model by which loans for the purchase or acquisition of capital assets takes place in the status quo, by uniquely leveraging the security and accessibility of the blockchain network. The current problem with modern loan/investment crowdfunding services is specifically that of a select few users defaulting on their payments, resulting in a drastically reduced return on investment for any contributors. With Distributed Investments, property that is acquired with the loan is initially co-owned, and each contributor to the loan has a stake in the asset value proportional to that of their contribution to the loan. Essentially, as payments are made, contributors sell their "shares" in the property to the individual who requested the loan. As the loan is fully paid back, full ownership is gradually given to this individual. In a payment for a loan has failed to be made within a given period of time and an extended late period, however, any money that was provided for the purchase of a capital asset is converted to a stake in that asset as it is silently moved to the market and sold again. Not only is such a system made possible with blockchain, but it works exceptionally well. Users can be confident the money the invest in loans toward the purchase of non-volatile property will be returned to them, at minimum, with time.
What it does
Offers Propy backed properties, distributed foreclosures and co-ownership, crowdfunded loans, loan payment, transfer of assets, sale of assets.
Challenges we ran into
Web3 provided problems creating new instances of smart contracts for a few hours.
Accomplishments that we're proud of
We were able to completely build our smart contract with features such as distributed foreclosure, loan payment, and sale of assets. Connecting our entire front end to the blockchain enabled real time transactions.
What's next for Distributed Investments
Having also written a private credit score management system for the blockchain, we plan to implement dynamic credit scores based off credit history and ability to pay off loans with our service. We also plan on exploring possibilities with our ERC20 TitleTokens - effectively "tokenizing" properties.
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