Versara, found online at Versara.trade, is the world’s first trade finance platform powered by “crypto credit enhancement.” Find out how it works today in our review.
What Is Versara?
Versara is a trade finance platform where crypto investors can provide credit enhancement. The goal is to allow small businesses to better access financing while giving token holders a unique opportunity to grow their wealth.
You interact with Versara over an app. You login to the app, then monitor your portfolio over time. You can verify invoices over the app and earn VXR tokens, for example.
Versara is holding an ICO in July or August 2018, with an airdrop taking place shortly thereafter. The goal is to launch the platform in the US by January 2019, although an MVP was completed earlier this year.
What Problems Does Versara Seek To Solve?
Versara aims to disrupt the modern global trade financing industry. The Versara website claims this industry has a $1.5 trillion USD problem: legitimate businesses have their loans rejected, and 60% of those businesses don’t seek financing again.
This gap is particularly prevalent with small and medium-sized enterprises (SMEs).
“The primary reason for rejection is either low bank profits or the need for additional collateral/information,” explains the official website.
In other words, businesses with a solid business plan and strong future growth are rejected for financing.
Versara also aims to solve general inefficiency problems within the trade financing ecosystem, including inefficiencies in risk assessment, underwriting, servicing, and recovery.
How Does Versara Work?
Versara aims to solve this problem by bringing “innovation and transparency to trade finance.” Versara uses blockchain to lower operating costs. The platform also relies on cryptocurrency as collateral.
With Versara, cryptocurrency is secured as extra collateral. That’s why it’s called “crypto credit enhancement.” You’re enhancing your credit using cryptocurrencies.
Versara also diversifies risk by aggregating invoices into structured asset pools.
The end result is that, with Versara, trade financing deals are accessible to retail investors. An ordinary investor like you can participate in the trade financing industry – an industry that’s typically reserved for institutional investors.
To protect against defaults, Versara maintains a cross-collateral reserve.
The Versara ecosystem revolves around the platform’s native tokens, called VXR. Certain participants will receive VXR as a reward for interacting with the Versara ecosystem. Buyers, for example, will receive VXR when they verify the authenticity of an invoice and provide proof of shipment.
Here’s how each of the four main participants in the trade financing ecosystem will interact with Versara:
Sellers Of Goods:
Sellers will only deal with fiat currencies. SMEs will submit invoices for verification, then accept fiat currency as funding against verified invoices. Sellers do not need to negotiate terms with lenders. They could receive up to 95% of the invoice within 48 hours.
Buyers Of Goods:
Buyers are rewarded with VXR for verifying invoice authenticity and providing proof of shipment. Buyers make payments to the fiat lenders assigned by Versara when invoices are due. The payments will be automatically distributed to remaining parties based on priority. Versara will provide fiat to VXR conversion when necessary.
Fiat lenders include traditional financial institutions and retail investors. Lenders only deal with fiat currencies as a traditional investor would. In the event of a default, fiat lenders are shielded from taking the loss, up to the market value of the collateral the crypto guarantors provided.
Crypto guarantors collateralize asset pools using specific cryptocurrencies accepted by the platform. These guarantees will invest in these asset pools, collateralizing them up to 20% of the total principle. Crypto guarantors will then be rewarded with VXR for the credit protection they offer. Crypto guarantors will only deal with cryptocurrencies. This is expected to give Versara an advantage over traditional trade financing platforms because crypto guarantors are not limited by borders – as they would be with fiat currencies.
Versara aims to benefit the four main parties that participate in the trade financing ecosystem, including:
Sellers Of Goods:
Sellers have easier access to traditional factoring or asset-based lending. They also benefit from a lower cost to invoice financing.
Buyers Of Goods:
Buyers receive rewards simply for verifying invoices and other documents. Plus, buyers have an ability to offer suppliers easy access to financing with better repayment terms.
Crypto guarantors have the ability to participate in the trade finance market. They can also access higher yield investment products.
Versara gives fiat lenders the opportunity to access factoring or an asset-based lending market with additional credit collateral. Plus, their risk is diversified and there’s a lower risk of total default.
Who’s Behind Versara?
Versara was created by founder and CEO Sean Liu, who founded the company in 2018. Liu has a background in financial products, including security finance, credit derivatives, and other fixed-income instruments.
Other listed members of the team include Dennis Thankachan (Co-Founder and COO), Daniel Napierski (Co-Founder and CTO), Maikang Wu (Co-Founder and Director of Trade Finance), Imtiaz Ahmad (Co-Founder and Business Architect), and Michael Cherkezian (Co-Founder and Director of Business Development).
Versara is based in New York.
The Versara Token Sale
Versara is holding an ICO in July and August 2018. However, details of that ICO are not currently available online.
Versara is also holding an airdrop. During the airdrop, Versara is distributing 2,500,000 VXR tokens that have a collective value of around 500 ETH. The airdrop will reward the first 25,000 participants. The average participant will receive 100 VXR tokens, and all participants will receive 80 VXR.
To receive VXR tokens in the airdrop, you need to complete tasks like joining the Versara Telegram group, referring friends, and following Versara on Twitter and Reddit. You can learn more details about the VXR airdrop here.
VXR tokens are ERC20 tokens.
Versara Trade (VXR Token) Conclusion
Versara is the world’s first trade finance platform powered by crypto credit enhancement. “Crypto credit enhancement” refers to the practice of collateralizing crypto assets to enhance credit.
Versara issued a press release announcing the company on June 29, 2018. The goal is to launch the platform in the United States by Q1 2019, although an MVP has already been developed. Stay tuned for more information about Versara as the platform prepares to launch. In the meantime, you can visit Versara.trade for more information or to read the company’s whitepaper.