Populous: Building a Liquid Factoring Investment Vehicle on The Blockchain
Populous is a company building a blockchain that collects capital from investors to finance invoice factoring. Factoring takes up 28% of global banking profits. It is an investment machine that banks have created where people can throw money into these funds that banks loan to companies who need to pay their employees. There might be months of expenses at the end of a long contract. Small to Medium businesses take out loans, at very high interest rates (10% – 30%) and pay thousands of pounds in setup fees.
The banks aren’t even loaning their own money. Yet they have a monopoly on this financial service because, like Populous CEO, Steve Nico Williams, explains you need millions to afford the insurance to operate in this space. This is the centralisation aspect of invoice factoring. Investors don’t need to trust invoice sellers because the bank with cover any malicious behaviour in their system. I guess that is what people are paying for.
What is Populous?
Populous instead suggests a system that lets invoice sellers instantly fulfil orders from a liquid exchange using the PPT token. PPT token is a stable coin, because it is tied to the value of these invoices, which as far as economics is concerned is a form of debt and therefor an asset. I think at this point, it is important to understand that not just any company can start selling invoices on the Populous channel.
CEO, Steve Nico Williams is heavily involved in data science and has co-founded several pioneering companies that have built software to handle large amounts of company data. Using a business reporting language called XBRL, Steve Nico William developed and entire tool set for collecting company data that can come to meaningful conclusions and cluster accounts that have a need for this software.
“To sell an invoice, you first need to register your company. You then have a hold on your account until you receive approval from the Populous administrator. Once the administrator approves you as a seller, you can submit an invoice and set a minimum sales goal. This also needs administrator approval. XBRL (eXstensible Business Reporting Language)
Populous analyzes the credit risk of invoices by using the Altman Z-score formula on real-time XBRL data. This data is publicly available and includes business information such as the value of debtor’s, the amount of cash on hand, and the creditors that are due within a year.” –Coin Central
Clients added to the Populous network will be identified and vetted through this software. Yes we have to trust that this is all above board. There is risk of collusion, but it is at the cost of severe reputational and legal damages to the colluding participants. Take a look at Steve Nico William’s previous experience in the space. With the amount of information about him and the seriousness with which Populous are approaching industry compliance and meeting standards, there is no clean break if they are harbouring any malicious intent.
Why Should I Invest In PPT Tokens?
PPT is a stable coin linked to the fixed value of invoice debt and pounds. When PPT is purchased, fiat currency is tokenized to the blockchain. The money and whole process is run through an Ethereum smart contract, which can instantly settle balances.
Invoices are paid to companies in PPT. Now the company still needs to sell their PPT back into fiat to pay their staff and wages, but there is liquidity, which was the whole reason they paid massive interest rates to banks.
But why would an individual buy PPT? Using cryptocurrency you can bid to fill invoices and if you win collect the value of the invoice and the principle. It’s a form of passive income. I guess it is similar to staking, but yeah, you can buy a company’s accounts receivable, and charge them interest as they pay it back.
This removes the high barriers of entry set up by banks. To participate in a factoring fund, minimum requirements are tens of thousands of dollars, and you pay fees to the bank because they are providing a service.
In contrast you can buy invoice or join a group buying invoice on the Populous network for as little as $100. I see a lot of value in this, especially considering the stablilty of the coin. involved in the Populous network and earn returns on a stable coins.
If PPT is So Stable, Why Is It Increasing in Price?
PPT’s speculative price is a reflection of what value people place on network participation and the inherent scarcity of cryptocurrencies. There are 37,004,027 PPT in circulation, early March, and only 53,252,246 PPT will ever be created. Demand of a finite thing increases price, ceteris paribus. The coin is tied to the value of fiat through a buy-back mechanism. “Poken is a coin linked to the Fiat currency. Populous starts with the GBP in the initial phase and the value of a poken always corresponds to one GBP.” – Whitepaper.
How can a coin that has done this be considered a stable coin?
Poken and PPT are two separate tokens. Pokens are tied to one GBP and they are used on the network to pay out invoices in local currencies and hold value on the network. If you invest 10,000 GBP worth of PPT to the network they are converted to 10,000 Pokens. Off the network, the PPT token can be worth as much of as little as market deems appropriate, but investors and companies are always getting the amount of equivalent fiat when they send the pegged Poken token. You couldn’t do this with Bitcoin or Ethereum because people will get more or less than the value of the invoice and that isn’t a worthwhile prospect on an investment that returns such small margins.
Stephen Nico Williams : Founder and CEO
Stephen Williams has extensive experience in big data companies and a track record of success.Before he became the public face of Populous, he was founder and CEO of the 484 Group, co founder of SamEnrico, and co founder of Twillion.
and frequently comments on the main Populous Reddit forums. This is just my opinion now, but in my own Populous research I have run into Stephen’s digital presence on Steemit, Reddit, YouTube, Twitter and Medium. He has travelled far and wide to debunk and explain away the endless torrent of FUD that is thrown at Populous.
Zvezdomir Zlatinov : Solidity Developer
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