100% Self-assured Credit Loops System
In Protocol 1, all credits are fully collateralized
by issuers of credits. Therefore, there is no defaulting risk. For
providing this, issuers in credit loops have the right for 3x staking
until maturity dates of a credits.
Boosting Purchasing Power
Due to 100% assurance for redemption by issuers, there is no need for an escrow or aval at any point of shopping with credit loops in Protocol 1. Holders, i.e. providers of goods and services in a loop can benefit from 3x staking until they become endorsers by purchasing goods or services from new holders. By this way, they become endorsers and transfer their 3x staking right to new holders. There is no meaning for an endorser to transfer credit unless the transfer is for shopping since he/she transfer the 3x staking power.
MCL is the only staking system in the World where locked coins allow owners staking while they are circulating among people.
Trust Based Credit Loops
Escrow system and escrow services
Solution to Non-redemption in Trust Based Credit Loops
The requirement definitions have been completed for
trust-based blockchain solution (Version 2) but not yet been fully
implemented on the existing blockchain. The trust-based system works
similarly to the existing trust-based analog blockchain in paper-based
check checks, but with several preventive programs (3-layer
recommendation), self-assurance is provided against the problem of
non-payment (defaulting) or bouncing. In the trust-based blockchain
system, the issuer creates a credit similar to the banking system. The
difference here is that the credit created in blockchain is circulated
in a credit loop, in contrast to the bank credit where the credit
generally remains as the contract between the bank and the borrower.
Non-redemption problem in trust based credit loops is solved in a unique
There are several layers of protection against defaulting, i.e. non-redemption. First of all, the issuance and settlement processes of trust based credit loops will be through Escrows acting as responsibility and trust centers. They can have additional guarantees to be used in case of no refunds.
Issuers and endorsers in the credit loop layer will most likely have active/locked coins to be used as a collaterals in case of defaulting. Avalists’ activated funds in community layer may also be used collaterals.
The blockchain fund layer will also be used as a last resort against nonredemption.
In trust-based mode, the issuance or settlement of credit loops are performed by trusted escrow service providers, which act as distributed notaries. Those who provide this intermediary services are called “Escrows”. All issuer nodes in credit loops must verify their data by an escrow service to join the credit loop system. The Escrow system is similar to Notarization system with more responsibilities.
Mining/staking people can easily use the system with trustless features of Marmara Credit Loops. Data Management is only necessary for necessary people such as credit issuers and for trust based version.
Escrows and avalists in community layer provide an additional layer of trust in the blockchain. Currently, in the analog version of post-dated cheques, cheques are initiated by banks and banks do not issue checks to everyone. In case of promissory notes, avalists are more important. Escrows bear the main responsibility during issuance and settlement of peer-to-peer credits on Marmara system.
Data association for issuers must be through escrows. Escrows may be Web-based escrow services, Crypto Exchanges, Notaries, Post Offices, Law Offices, Credit Unions and even Banks. Not everyone can become an Escrow. Please contact us for details if you want to be an escrow.
To ensure that there is no identity theft in version 2, user (issuer) data should be managed by only through Escrows. This will be done by the Escrows with the their own Know Your Customer procedures, financial credit scoring system etc. Escrows will be responsible during issuance and settlement of trust based credit loops. Therefore, they will have earnings from blockchain fund in third layer planned for Version 2.