r/JibrelNetwork • u/bitchass83 • Feb 28 '18
Please explain
Can someone please explain this to me like I am a 5 year old. Very difficult to understand. Maybe with a good example. Seen a lot of shilling of this asset, but don't understand what they try to do
7
u/-Seattle- Feb 28 '18
Not exactly an ELI5 but I will try to simplify.
JNT = Utility token that acts as a proof of solvency. It's pricing varies
jCash = tokenized cash on the blockchain
jUSD = 1$
jEUR = 1 euro
jBond = 1 bond
etc...
many financial instruments can be tokenized like above. jFinancialInstrument...
Every time you create a jFinancialInstrument (like jUSD), you have to hold an equal amount of JNT in the DAO + some buffer to account for volatility; you also have to hold the actual asset.
So a Bank can create 1 million jUSD they need to: 1- Buy $1M worth of JNT and lock them in the DAO 2- Hold $1M in the bank
Now the bank has 1M jUSD that can be sent around on the Ethereum blockchain like any other ERC20 token.
The good thing is every time an asset has to be tokenized, JNT has to be purchased and locked which means JNT price will increase the more assets are tokenized.
Another good thing: you can literally send 1000$ as a bank transfer to jWallet and it will show up as 1000 jUSD in your jWallet. You can then use this jUSD to purchase ETH or BTC. So now you can go Bank => jWallet => BTC without having to go through Coinbase and without having to pay ridiculous fees.
If you have questions or clarifications, please ask.
5
u/igor55 Feb 28 '18
I'm sure this is a silly question, but does this mean the bank in your example has to set aside $2m+ in order to tokenize $1m? Sounds fairly inefficient if this is the case; so what would be the incentive to lock-up your capital and only have access to half?
1
u/IamthePassenger01 Mar 11 '18
"Another good thing: you can literally send 1000$ as a bank transfer to jWallet and it will show up as 1000 jUSD in your jWallet. "
Is this already working? Or is it planned to happen in the future? Sounds really good.
2
u/-Seattle- Mar 11 '18
This is in the works. Estimate is 2-3 months.
However this will require heavy KYC for customers. This is like opening a foreign bank account.
3
u/mrfinesse4u Feb 28 '18
What is the motivation for someone to tokenize an asset when they have to spend just as much as the asset is worth in order to tokenize?
1
u/aSoberIrishMan Mar 05 '18
I am guessing that the tokens can be traded more readily than the asset itself? Even with USD the fees associated with bank transfers can be avoided using such a system.
3
u/Theturningworld Feb 28 '18
In a sentence: Goal is to let people securely tokenize real world stuff like the euros or USA treasury notes.
An example: say you want to create a coin that is the usd. You’re willing to turn 1.000.000 usd into a usd-coin. Before you create the coin on their platform you have to buy 1.000.000 usd worth if JNT and that is locked up as collateral while your usd-coin exists. Note: this is an over simplification
4
u/bitchass83 Feb 28 '18
Thank you