Pioneering Financial Innovation with TX Contextual Data
twinFin
Jan 10, 2024
5 min.
In today’s discussion, let’s dive into how Request Network can simplify your financial life. We will focus on:
The past and the future of financial data onchain
A simple guide to understanding how Request Network streamlines it all
Automation and compliance of payment requests
PEPPOL - How IRL governments and business entities transact across borders
Request Network - decentralization and ownership of your financial data
The innovative possibilities of transaction contextual data
Apps on Request Network already building the Future
Financial Onchain Data - Past and Future Possibilities
When Bitcoin first came out in 2009, the only available onchain action was to send Bitcoin. However, today we have Ethereum and over a thousand other blockchains that support onchain actions outside of finance, such as gaming and music. But despite the advanced DeFi algorithms, when it comes to payment and invoicing, we still only have three types of data: sender, receiver, and amount.
This is where Request Network comes in. It serves as the contextual layer for onchain transactions, providing the story behind each transaction - the whys, the whos, the initiation and settlement times, and the broader financial implications. Request Network consolidates the context of all onchain transactions and enables long-awaited financial innovations like onchain undercollateralized loans, credit scoring, and automated tax reporting.
How is it so simple? How does Request Network work?
Request Network is a protocol to store payment requests to be retrieved efficiently for later use. Everyone interacts directly with the protocol–creating, paying, and retrieving the requests stored on the decentralized network.
Creating a Request: The payer or the payee can initiate a payment request detailing the amount, currency, and parties involved. These requests can be modified or canceled as needed.
Paying a Request: The payer completes the transaction using a secure smart contract.
Tracking a Request: All payment activities are indexed and monitored. Now, apps can access request details, assess the balance, and review the transaction's status and history. The payer/payee also has the option to keep their transactions encrypted and private.
For more details on how Request Network works, please refer to the docs.
The Real World Innovation of PEPPOL and Why Request Network is Better
PEPPOL (Pan-European Public Procurement On-Line) is an international network facilitating easier electronic transactions between businesses and government bodies. By standardizing the format of business documents like invoices, it streamlines cross-border trading and simplifies compliance. Over 40 countries, including Singapore and Germany, have adopted PEPPOL.
Like PEPPOL, Request Network also standardizes and automates the processes to save time and money. But we take a step further by leveraging blockchain technology for the security and verifiability of financial transactions. And most importantly, Request Network goes beyond functionality to bring greater financial inclusion.
Innovations Enabled by the History and Context of Onchain Transactions
Request Network is revolutionizing financial data management by securely storing all invoices. These invoices are cryptographically signed by relevant parties, ensuring their authenticity and making them easily verifiable. This opens up a world of innovative financial opportunities.
Payment and Invoice Management: Simplifying Financial Interactions
Request Network simplifies payment and invoice processes by providing a transparent, secure, and efficient system for managing financial transactions. It allows users to create, share, track, and reconcile invoices on-chain. This facilitates seamless B2B and B2C interactions and enables future use cases.
Revolutionizing Accounting with Real-Time, Fraud-Proof Data
Real-time access to transactional data streamlines reconciliation processes and financial reporting. It can enable data to be fed directly into reporting tools, ensuring up-to-date and accurate financial statements.
Furthermore, the immutable nature of blockchain, along with detailed transaction contexts, greatly enhances fraud detection and financial security. This makes it easier to identify anomalies and inconsistencies.
Credit Scoring: Optimized and Inclusive Financial Profiles
Existing models like FICO Score and Petal Credit Card leverage traditional transaction history, such as telco bill payments, to target a more extensive user base. However, they still overlook freelancers and crypto asset holders.
Request Network offers a more inclusive and accurate global alternative by evaluating creditworthiness based on actual transaction histories. This approach ensures that more individuals and businesses can access credit products tailored to their needs.
Automated Tax Reporting & Auditing: Revolutionizing Compliance
Request Network can automate the most cumbersome aspects of business operations, such as tax reporting, auditing, and compliance. All the convenience of cloud-based, web2 services plus blockchain's inherent transparency and security features.
This innovation dramatically reduces the administrative burden on businesses, ensuring compliance while allowing them to focus on growth and operations.
Risk Assessment & Insurance: Advanced Business Analytics
Request Network utilizes historical invoice data to empower businesses to perform advanced risk assessments and create customized insurance solutions.
This enhances financial well-being and facilitates the development of more effective and personalized insurance products, taking advantage of the extensive transactional data accessible onchain.
Innovate with Request Network
“FLock and Request Network are set to reshape DeFi credit models, reducing collateral rates and enhancing the efficiency of financial transactions.” - Jiahao, Founder of FLock
Financial innovations are just unfolding, and we are not alone in this journey. BSOS is building with Request Network to revolutionize supply chain finance to enhance transparency and efficiency. Joba is partnering with Request Network to simplify payments in the web3 talent marketplace, guaranteeing fast and secure transactions for users.
Join Request Network, a community of innovative developers and founders in decentralized finance. Let's redefine the financial landscape and explore new frontiers.
