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Provenance, the blockchain that changes lending
Provenance, the blockchain that changes lending
Blockchain

Provenance, the blockchain that changes lending

By Eleonora Spagnolo - 8 Jun 2020

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Provenance is a blockchain dedicated to financial products, owned by Figure Technologies

Its aim is to revolutionize the financial sector in terms of how assets are issued and marketed. It made headlines just recently for allowing a $400 billion third-party loan between two companies, Pacific Private Money and Saluda Grade.

It is a permissioned and public Proof of Stake blockchain based on three concepts:

  • Distributed, in the sense that there is no identity that holds Provenance, which is actually distributed between different stakeholders, 
  • Immutable, because the information it contains cannot be changed.
  • Trustless, in the sense that it does not contain “reliable” information, but true. 

The Hash token

Provenance also has its own token, named Hash. The token represents the fees paid to enter the transaction on the blockchain. The token is not present on CoinMarketCap but has a total supply of 100 billion. The Hash tokens were put on sale during the STO of June 2019 which allowed Figure to raise $20 million to finance their platform. Figure currently holds 72% of Hash, investors 13%, strategic partners 5% and the administrator holds 5%. 

How does the Provenance blockchain work

The blockchain designed by Figure is “in-house” even if based on Hyperledger’s consensus model. It has 4 main participants: 

  • the administrator, 
  • the members, 
  • the omnibus banks, 
  • stakeholders. 

The administrator runs a board that is elected by the holders of the Hash token. He or she is the one who creates smart contracts and determines transaction costs. The “members” are those who make the transactions on Provenance. They can also be investors. The “omnibus banks” are those who allow Provenance to operate, and are responsible in particular for KYC/AML procedures.

Its first use case was recorded in 2018 when Figure started using Provenance to generate and distribute equity loans through the blockchain

The technology set up by Figure and Provenance eliminates costs, commissions and increases liquidity.

According to Figure, this system reduces transaction costs by a total of 300 billion.

Provenance can currently claim to have managed over a billion dollars worth of financial services that have been securitized on its blockchain. And they promise to grow further with financial instruments that will revolutionize the world of lending. 

 

Eleonora Spagnolo
Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

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