Meet Decentralized Inter-Protocol Offered Rate (DIPOR), the “LIBOR For Open Finance”
Our job is to show the most exciting new blockchain projects and prospects for our readers. Because of this, today we will talk about the Decentralized Inter-Protocol Offered Rate (DIPOR). This project was first spotted by The Block Crypto.
About DIPOR: What LIBOR Actually Is
The idea is to create a project that could be used just like the London Inter-Bank Offered Rate (LIBOR), which is part of the reason why it has such a similar name. LIBOR, in case you are not familiar with the term, is a benchmark interest rate that is used by several banks in the world in order to lend money to each other.
LIBOR rates vary a lot. They can be used for quick loans or for projects which are far bigger. It includes collateralized debt obligations, bonds, loans, interest rates, etc.
In fact, LIBOR was generally universally accepted until before a scandal happened in 2012. This has definitely impacted its popularity. For instance, now Secured Overnight Financing Rates are way more common in the United States than LIBOR.
Whatever the reputation that LIBOR has as an institution, it does not destroy its impact as a very useful tool, which is what really inspired the DIPOR team. They took the original idea and believed that they could be able to turn it into something considerably better.
A Benchmark for The Open Blockchain Market
Open finance is a growing movement, which is why DIPOR was created. The industry is currently in a dire need of more benchmark interest rates. This way, these interest rates can be adjusted and determined in a fairer manner. MakerDAO already has a similar system, but the idea of DIPOR is to be able to be used in more than a single platform in the industry.
DIPOR was launched on April 10. 14 members of the Open Finance community made an official call to start the product, The Block Crypto reported.
This new technology will be an on-chain oracle that will be used to weight volume averages in a way that it will borrow interest from specific cryptos. Then, people will be able to use this tool to add or remove platforms from a list that will be used by the investor. This way, you can use a market which only has the specified rates that you want.
While it is not fully decided at the moment the total number of entites that will be used in order to calculate the rates, it is generally considered that the most important metrics of the market will be used in order to create the DIPOR rates.
One problem is that rates from centralized companies like Genesis, BlockFi, Unchained Capital, etc, are often hard to access and impossible to audit, so they could not be included and more focus will be given to their decentralized counterparts, as their rates are a lot more transparent and easy to use and will be always readily available on-chain.
The process of tweaking all the specifics will certainly take its time, but if the company is able to achieve its objective, then we are bound to see something really new and exciting.
There is a very limited number of services that are similar to this one today and most of them are focused only on a single platform, so what is being offered here is really revolutionary and it can help to take the blockchain-based financial industry to the next level.
The truth is that the decentralized world still lacks a lot of what the centralized financial market has already created, so it is important to be focused on innovation and in solving these new problems that emerge.
DIPOR Is The Future Of Blockchain-Based Finance
What can be said is that this company is definitely an important part of the future of blockchain-based decentralized finances. While the team is still working on the specifics, having such a product will be very important.
The consensus from the developers at the launch call was to launch a prototype as soon as possible (which may mean 2019 or 2020). Perhaps, initially, the system will use data from Nuo, Compound and Dharma only, as the question of which data to use is very controversial.
With a strong prototype, DIPOR can be put out in the real world and start being a part of the revolution.