There’s a good chance that you either have a loan right now or have had a loan in the past. If not, there’s a good chance you will have a loan at some point in the future. There are some exceptions to this and that mostly implies to people who simply are unable to receive a loan.

Loans are extremely important because they provide us with money in times of dire need. While no one wants to be in debt, sometimes there is no other option. Even business, both small and large, rely on loans to finance growth or new set-ups.

Loans are important and we need them, but some people simply are put at a disadvantage because of the current state of the financial industry. Centralization empowers a few to receive loans at greater rates and with greater ease; this does not make much sense if the person is willing to provide a collateral for the loan.

Blockchain technology is making it possible to make loans a decentralized market. Second generation blockchains can provide smart contracts to developers that want to build decentralized applications or protocols. These smart contracts can be used to hold assets under certain conditions and can release them only once preset requirements are met.

Vena Network’s Decentralized Loan Ecosystem

Earlier, I wrote about Vena Network’s ability to have a greatly positive effect on OTC trading. The Vena Protocol, though, is designed to be generic enough to be great for multiple purposes in the financial industry. The platform has a key focus to be the key ecosystem for decentralized loans because it has taken a great step to facilitate these through a unique node facilitation.

The decentralized loans provided by Vena Network will be a step forward from the current lending system. At the moment, banks collect money from people and then lend it to other people. There are plenty of problems with this.

The bank could become insolvent and could therefore default. All uninsured funds will be lost.
There are strong arbitrage opportunities across banks as banks take advantage of people’s geographical limitations.
Banks claim large fees and little is left for the people whose money actually finances the bank’s loan operations.

Vena Protocol for Loans

Vena Protocol is generic enough that the smart contract built with it are able to support all the complex situations that are involved in a loan. This ensures people’s collateral is safely held in a trustless contract.

To top it off, Vena Network allows only nodes that have staked VENA tokens to be qualified as platform lenders. Additionally, a strenuous vetting makes sure node applicants are qualified enough to know what they are getting into. Loans can be a complex business and not everyone should qualify, and on Vena Network this logic is put into effect as not everyone will quality.

Vena Nodes can lend to others if they are comfortable with the provided collateral. Then agreements can be made with the funds securely held in a smart contract. If a problem comes up, the Vena Jury will be utilized to make sure an arbitration or case conclusion is reached.

Conclusion

Vena Network provides a new, decentralized way to give and receive loans in a decentralized ecosystem. Vena Nodes, which can issue a loan, need to pass a qualification process. Because loans are a complex agreement, a Jury is in place to resolve conflicts that the smart contracts cannot handle.