ICO Spotlight: FIC Network Focuses On Fixed-Income Market Problems

News | July 25, 2018 By:

FIC Network is a decentralized blockchain platform for the investing and trading of fixed-income securities. The FIC Network team believes that there are many current problems with the US$90 trillion fixed-income investing market. Settlement times are slow, taking at least a few days and up to a week or two for most transactions to clear. Costs are high because of the trusted intermediaries required to run the system. Security is costly because data is held on centralized servers.

The FIC Network team believes this problem can be fixed by creating a blockchain platform for the trading of loans, bonds, ABS, credit default swaps, and other fixed-income instruments

The FIC Network is based on the Stellar Protocol, with some extra features created to adapt Stellar to the world of fixed-income assets. Like Stellar, FIC employs two primary concepts: assets and accounts. Accounts include users and financial instruments. Assets include “currency tokens” that can be redeemed for currency and “expected cash flows” (ECBs) that pay an income in the form of a currency token.

Financial instruments are accounts that create ECBs. Users are accounts that create or change financial instruments or issue or hold currency tokens.

Some of the users on the network are “gateways” that issue currency-tokens backed by real currency. However, a particular user cannot hold a particular token unless a “trust line” is built between the user and the gateway. This ensures that no user ends up accidentally holding a token from an issuer they do not trust.

The FIC Network contains an exchange system that allows it to handle trades between users who only trust certain currencies. If a user with U.S. dollars wants to buy an asset from a person who only accepts Euros, the network’s algorithm will try to find another user who can trade Euros for dollars at an agreeable price. It can do this with up to six degrees of separation.

When a bond or loan is redeemed, it is paid off in currency tokens, which are then exchanged at a gateway for real currency. In this way, any fixed-income instrument can be owned and traded on a blockchain. This dramatically lowers costs, speeds transactions, and increases security.

The closest competitors to the FIC Network are major brokerages that carry fixed-income investments. These include TD Ameritrade, Fidelity, TradeKing, and similar platforms. However, these platforms are very slow and costly. These problems are inherent to centralized trading systems. For this reason, the FIC Network believes it can effectively compete with these platforms. [MORE]

The FIC Network summary was originally published on the Amity Blog. The Amity editorial team of cryptocurrency experts and writers predominately covers whitepaper summaries of ICOs and long-form articles about topics that interest their community.

Read more about this and other ICOs at BlockTribune’s ICO Wiki