In its own white paper, district0x developers mention two disruptive upstarts that have gone on to revolutionize entire industries – Airbnb and Uber. Conceptually, these ideas have gained ground not only because of the network of users but as a result of physical assets owned by the collective. In other words, Uber works because some people need transportation and other people own cars and can provide a lift. Airbnb works because some people need a place to stay and other people own houses and can offer accommodation. Therefore, it is the combination of a network of users and assets that make these businesses thrive.
More than rides or a place to stay, people seem to endlessly require money; and some of us have it, some of us don’t. Globally, the banking industry is said to be worth somewhere near 124 trillion dollars (quick wiki search) – money generated through interest, fees, and service charges.
With that, I introduce: Mammon
Mammon is a marketplace for borrowing and lending made by the community, for the community – the haves to the have-nots. Using Mammon, borrowers can search for a person(s) who is offering to lend, and at an agreed interest rate, can facilitate a transaction to be repaid over xxx period of time. Lenders, in addition to offering fiscal resources, can choose to team up with other lenders to form ‘banks’ through which they can increase their collective offering to garner a greater sense of security and improve their ROI.
All users will receive integrity ratings based on their adherence to community regulations and as such, will rise or fall as borrowers and lenders based on their reputation.
The interest rate will be set by the community which is where Mammon really shines for lenders. Current real world interest rates are historically low, offering very little in the way of growth over time for savers. The net effect is that savers are driven into riskier assets (stocks, crypto, real estate) in a chase for yield to increase the return on their savings. Mammon can help by incentivizing lenders with higher interest rates.
To borrowers, Mammon offers an opportunity that they might not have via traditional banking methods. Length of employment, credit score, and net income are great starting points to determine a person’s debt to income ratio and repayment ability… but what about those who are just getting started in life? Or who live in an area where banks are inaccessible? Or who have a great idea for a new business but lack the funding? Even to those who have made a mess of their real world credit score, or have NO credit score, Mammon offers the opportunity for a fresh start.
Although this idea might seem far-fetched, real world default rates on loans run just over 1% at their peak. On credit cards, around 3%. When the process works (as it does 98% of the time) both borrowers and lenders are happy. Through the process of natural selection those who default as borrowers are prevented from borrowing again and conversely, those who repay are entrusted to borrow more. The subsequent result is a greater rate of integrity throughout the community as it refines its user base.
In order to secure the long-term success of Mammon, to reduce risk for the lenders and build trust among users, I suggest thresholds for lending amounts over time. By way of example, perhaps an initially low threshold of $100 for a first loan to be repaid over xxx months time after which point, the borrower’s reputation will increase making them eligible to borrow more. In this way, a user cannot game the system by submitting an initial loan request of say, $10,000 and then defaulting, as they would first have to prove their ability to repay with increasingly larger amounts over time.
All in all, Mammon would be a slow but steady growth mechanism for both borrowers and lenders with the potential to become an alternative to traditional banking.
Name:
Mammon
Purpose:
Community Banking
Description:
In its own white paper, district0x developers mention two disruptive upstarts that have gone on to revolutionize entire industries – Airbnb and Uber. Conceptually, these ideas have gained ground not only because of the network of users but as a result of physical assets owned by the collective. In other words, Uber works because some people need transportation and other people own cars and can provide a lift. Airbnb works because some people need a place to stay and other people own houses and can offer accommodation. Therefore, it is the combination of a network of users and assets that make these businesses thrive.
More than rides or a place to stay, people seem to endlessly require money; and some of us have it, some of us don’t. Globally, the banking industry is said to be worth somewhere near 124 trillion dollars (quick wiki search) – money generated through interest, fees, and service charges.
With that, I introduce: Mammon
Mammon is a marketplace for borrowing and lending made by the community, for the community – the haves to the have-nots. Using Mammon, borrowers can search for a person(s) who is offering to lend, and at an agreed interest rate, can facilitate a transaction to be repaid over xxx period of time. Lenders, in addition to offering fiscal resources, can choose to team up with other lenders to form ‘banks’ through which they can increase their collective offering to garner a greater sense of security and improve their ROI.
All users will receive integrity ratings based on their adherence to community regulations and as such, will rise or fall as borrowers and lenders based on their reputation.
The interest rate will be set by the community which is where Mammon really shines for lenders. Current real world interest rates are historically low, offering very little in the way of growth over time for savers. The net effect is that savers are driven into riskier assets (stocks, crypto, real estate) in a chase for yield to increase the return on their savings. Mammon can help by incentivizing lenders with higher interest rates. To borrowers, Mammon offers an opportunity that they might not have via traditional banking methods. Length of employment, credit score, and net income are great starting points to determine a person’s debt to income ratio and repayment ability… but what about those who are just getting started in life? Or who live in an area where banks are inaccessible? Or who have a great idea for a new business but lack the funding? Even to those who have made a mess of their real world credit score, or have NO credit score, Mammon offers the opportunity for a fresh start.
Although this idea might seem far-fetched, real world default rates on loans run just over 1% at their peak. On credit cards, around 3%. When the process works (as it does 98% of the time) both borrowers and lenders are happy. Through the process of natural selection those who default as borrowers are prevented from borrowing again and conversely, those who repay are entrusted to borrow more. The subsequent result is a greater rate of integrity throughout the community as it refines its user base.
In order to secure the long-term success of Mammon, to reduce risk for the lenders and build trust among users, I suggest thresholds for lending amounts over time. By way of example, perhaps an initially low threshold of $100 for a first loan to be repaid over xxx months time after which point, the borrower’s reputation will increase making them eligible to borrow more. In this way, a user cannot game the system by submitting an initial loan request of say, $10,000 and then defaulting, as they would first have to prove their ability to repay with increasingly larger amounts over time. All in all, Mammon would be a slow but steady growth mechanism for both borrowers and lenders with the potential to become an alternative to traditional banking.
Ethereum Address:
0xC9B13D83F544189aea5F52E600B4c4a1446D1D3d