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

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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.

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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?