Smart Contracts Empower Financial Inclusion, GSN Changes Financial Services Model

GSN, the world’s first decentralized social banking service system, uses blockchain technology to creatively use smart contract solutions to complete the aggregation of supply and demand of funds, serving the public in an efficient and simple way.

Since Q3 2020, the concept of decentralized finance (DeFi) has become more and more accepted. In the crypto market, various types of decentralized finance application products are emerging and more and more funds are deposited in the market. As of May 17, 2021, the total locked-in volume of the decentralized finance (DeFi) market has reached $72.69 billion.

Smart Contracts Empower Financial Inclusion, GSN Changes Financial Services Model

Under the influence of the wave of decentralized finance, the traditional financial industry is also thinking about how to innovate and upgrade the traditional business with the decentralized and non-tamperable characteristics of blockchain. J.P. Morgan, as we know it, has pioneered the use of blockchain technology to enhance the problem of transaction friction in the process of large settlement. In addition to JPMorgan Chase, Bank of America (Bank of America), HSBC, Citibank, Goldman Sachs Group, etc. are deeply involved in the blockchain field, involving business including payments, cross-border remittances, custody, privacy transactions, bond issuance and other traditional application scenarios of banks.

And just on January 4, 2021, the Office of the Comptroller of the Currency (OCC) issued a letter of explanation approving the use of new blockchain and stablecoin technologies by U.S. banks. This clearly conveys an important message to us: the use and development of blockchain technology in the financial industry will produce a broader application space in the future, and banking with decentralized characteristics will become a trend.

However, large banks tend to solve the efficiency problems in the field of payment and settlement, while in the field of small and micro loans, which are less accessible to large banks, how to better realize the two-way flow of capital supply and demand and increase the efficiency of capital use is an urgent problem to be solved to achieve financial inclusion.

At present, GSN, the world’s first decentralized social banking service system, makes use of blockchain technology to creatively use smart contract solutions to complete the matching of supply and demand of funds and serve the public in an efficient and simple way.

GSN operation mechanism

Decentralized lending is not a new thing in the world of DeFi. However, the high Gas fee and the relatively cumbersome operation process can make many users feel overwhelmed when using it. GSN, on the other hand, has made a lot of technical innovations and optimizations that can make it easy for users to use.

On the GSN platform, there are only two types of people: those who provide service (Provide Service, PS) and those who receive service (Get Service, GS). Users who are willing to provide funds as well as those who have a need for funds can apply for the corresponding services in the platform page. Users only need to confirm the amount, wallet address and other details to complete the application. After that, wait patiently for the smart contract to complete the aggregation, and then you can enjoy the service.

When calling the contract, you only need to pay the corresponding value-added consumer service tax GST (1USDT=1GST) of the platform. The service provider (PS) can also share 5% of the block bonus for each block. At the same time, for the safety of funds, once the success rate of PS and GS aggregation within a block is less than 90%, the block is considered as not successfully matched and all funds are returned to each user in the original way to continue to complete the matching of supply and demand in a new block.

According to GSN official data, GSN version 2.0 global PS service was officially launched on May 7, with users from 58 countries around the world enthusiastically participating, and the total number of blocks applied for on the first day was highly over 48, and the number of ETH contained in the blocks on the chain reached 35,624, worth nearly $138 million!

GSN’s innovation

The emergence of GSN platform undoubtedly has a lot of innovations compared with traditional financial products, and it can even be said that it has optimized the mode of traditional financial services to a certain extent.

First of all, the funds participating in the GSN platform do not need to have their assets hosted in a third-party platform, but are placed in each user’s own wallet. In the transaction, only the wallet address needs to be filled in, and then the smart contract call can be completed. This is a completely peer-to-peer approach to fund invocation, allowing users to eliminate the risk of funds that may arise due to credit issues with the hosting platform.

Secondly, the use of smart contracts to aggregate cash flow requirements in the marketplace enhances operational efficiency by automating the entire execution process, avoiding the human interference factor that occurs in traditional financial operations due to the review of centralized organizations. More importantly, smart contracts become the basis of the whole market operation, and the role of many “middlemen” in the traditional business will be gradually eliminated, and the market efficiency of micro and small loans will be further improved, which is an upgrade of the whole financial ecology.

Third, one of the characteristics of blockchain is that it cannot be tampered with. All transaction data on the GSN platform will become part of the user’s credit and be stored on the chain. This reduces the cost of credit collection, makes trust data infinitely usable and shareable, and drastically reduces the problem of falsehood of massive data.

Fourth, the GSN platform is specially designed with a rollback mechanism in order to ensure the safety of users’ funds. The advantage of blockchain is that it is traceable but not tamperable, which ensures the authenticity of data, but on the other hand, the non-tamperable feature also increases the uncertainty of the development of the whole chain, such as blockchain forking. GSN’s innovation in this regard is to enhance the rollback function of data. If the success rate of aggregating funds from fund providers and demanders in a block within 24 hours is less than 90%, all funds within the block will be rolled back and the system will start the block application process again. This will ensure the safety of all funds within a block that apply to provide or receive services.

Finally, in the era of blockchain, the world is flat. In GSN platform, there is no more geographical limitation of funds, and the cooperation of supply and demand among users can reach the whole world, and the efficiency of funds will be maximized. According to the latest data of GSN platform, users participating in this round of block application come from 58 countries around the world, and more countries will join in the future!

Conclusion

In the description of many decentralized products will quote a passage from Kevin Kelly in “Out of Control”, “The swarm seems to have no unified management and is out of control, but the swarm collaborates with each other, yet it is so efficient and orderly.” This is exactly the state that every decentralized financial product can achieve. Although each user seems to be a scattered individual and the system lacks the management of a unified institution or organization, the smooth flow of financial capital can still be achieved by relying on the rules of smart contracts and strong community autonomy.

In today’s era, the integration of blockchain technology and the financial industry has become a major trend. In the future, we will see more and more decentralized financial products coming to the public, and GSN service system with its unique and innovative functions will definitely become one of the most representative products.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/smart-contracts-empower-financial-inclusion-gsn-changes-financial-services-model/
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