Whitepaper

The New Paradigm of DeFi
Flexible Finance

Whitepaper version 1.0

Publisher:
Chaingain
hi@chaingain.io
www.chaingain.io

1/1/2021
Executive Summary

CHAINGAIN– FLEXIBLE FINANCE IN THE DEFI 2.0

We now live in a new paradigm of distributed services and globalization that have technology, flexibility, and diversity at core. We live in a diverse world populated by people with different needs and resources. It’s time that finances enter this paradigm and DeFi is here to re-establish the rules. Decentralized Finance was something we could not dream about a couple of years back when it seems there were no real alternatives to banks. Many projects have launched since then and the market has increased exponentially last year, entering a maturity phase.

We have joined the DeFi space looking to create a real alternative to traditional finance, to let the users set their own terms and rules and create a flexible financial system. We realized the very core mechanism of DeFi, the collateral engine was its main set back. Putting more money as collateral than the actual loan has simplified tremendously the lending process but has created a mathematical unfairness on the shoulders of the borrower. They need money to borrow money and we want to change that and act as an enabler. The goal of Chaingain is to create a real alternative financial system, we decided to tackle this core DeFi problem and worked on a new service that is going to take DeFi loans to a new level.

Our role is to bring peace of mind and comfort to borrowers by taking DeFi to next level that brings more value its users by solving the collateral imbalance and make the capital accessible, keeping the money flowing into the economy.

WHAT IS CHAINGAIN?

The ultimate goal in the DeFi paradigm is to offer people the liberty of transaction by creating an alternative viable wealth generating platform, totally safe and trustworthy.

Chaingain is a decentralized financial platform, offering a variety of products tailored to every individual, ranging from lending and borrowing protocol to capital renting.

OUR MISSION

With the exponential growth of users and capital in the DeFi market, we put in place an ever-growing team of experts, and got to the essence of decentralized trading.

De-Fi and blockchain space had first attracted crypto literate people, many with technical background and an interest in technology. As the interest has expanded to broader audiences, Chaingain is here to quench their thirst of simple, hassle-free transactions.

We believe that De-Fi should be for everyone regardless of their technical, mathematical abilities or crypto literacy.

Chaingain mission is to serve every potential lender and borrower:

the lenders = every individual who owns capital (fiat or crypto) and does not agree to receive low or negative interest from the bank
the borrower = every individual who owns collateral in crypto and want to have access to money without having to sell their crypto portfolio.

THE INGREDIENTS
CAPITAL RENTAL - GAIN RENTAL

Imagination, projecting the future and long-term vision were some of the main qualities that led to the success and rise of the human species. Starting with childhood, adolescence and maturity we continue to have goals and aspirations, to design our future, to project our success, happiness, accomplishments in a future that is yet to come. Many of our dreams require capital and investment to materialize, so there is no surprise many of us have at least once fantasies about winning the lottery and becoming millionaires. DeFi loans are a quick way to access capital, but not unless you already have more capital to put aside as collateral. This does not work for most people, so we decided to change that.

OUR SOLUTION

As we were looking for solutions to creating a capital lending product, we realized we have an existing service in a very different industry that already has provided a workable solution: the car rental service. Most of us are quite familiar with this service especially when traveling on vacation: we rent a car for a couple of days, we pay a daily rental fee, we have a small security deposit (200-300 $ on an average car) and we get the deposit back if we return the car in good condition.

Now imagine you would rent a car by in the defi world. You could rent a 20,000$ car for a week by depositing 40,000 $ as collateral. You would need more money than you would be willing to borrow. It’s not efficient to block this money, when they could be flowing, fuelling your finances.

Therefore, we embedded the existing car rental model into our service as opposed to the existing collateral backed loans.

CAPITAL RENTAL

- You select the amount you need to rent and the period for which you need it- You will deposit a (reverse LVR) collateral 10-15% of the Loan value
- You pay a daily rental fee to our platform
- You invest the capital in a safe and diversified ecosystem
- You get your investment gains and get back your collateral at the end of the loan

This means a borrower would get 10,000$ with a 1000$ guarantee via Chaingain. Going back to the car analogy, the most important thing is to make sure you return the car without scratches. So, we have designed a save driving environment for you.

In order to protect our capital and your investment we are bringing to our platform the best DeFi service in the market starting with simple currency exchange (investment in currencies), loans and lending pools, so that you could use the capital, but inside a safe ecosystem.

We aim at integrating smart contracts from the major platforms such as AAVE, Uniswap, or Bankcore and looking to expand further the ecosystem of partners.

In this way even though we allow user to use a rented capital for investment, the capital stays in a safe ecosystem and only the gains are transferred to the user account. We embed this mechanism in our smart contracts, and we also provide safe interactions with 3rd party smart contracts for diversified investment.

Additionally, we have a reverse investment and liquidation mechanism that will liquidate your collateral and reverse the investment if the value of the investment will decrease bellow a defined threshold ex: 5%.

CAPITAL RENTAL PROCESS

CAPITAL POOL - GAIN POOL

           The fuel for the capital rental engine will be supplied by a capital pool where lenders can join by adding capital and making gains on the capital rental fees in a short period of time. Lenders’ capital will be protected by the enforced smart contract, reverse investment and liquidation mechanism triggered by the monitoring system presented in the process above.

In the end everybody wins: it’s a chain reaction that fuels everyone’s’ finances.

GAIN MATCHER

We have designed a simple and robust flexible financial product.

A peer-to-peer lending and borrowing services that allows you to get matched with a lender or borrower:
- You chose your role: lender or borrower- Your set your terms or match an existing offer- You sign contract once your offer was accepted
- You earn interest or use your borrowed capital for your needs.

While Capital Rental (GAIN Rental) is a short-term high capital loan and under collateralized, this product is a classical robust, collateral backed lending service.

In order to serve every possible capital user, regardless of their technical and crypto literacy, Chaingain product has been designed to embed two key characteristics: trust and simplicity.

TRUST

Providing trustworthy services is key to the adoption of Chaingain. To secure user’s capital from any risk we have two important pillars:

• Platform algorithm and funding that ensures lender always gets their loan repaid. This is built in the smart contract ensuring value of investment by monitoring, reverse investment and liquidation mechanism protects from collateral value fluctuations. Also, platform reserve fund will be set to further protect the loans. The capital for rent stays in the platform ecosystem and only the gains and collateral are transferred to the user at the end of the process.

• Platform security – The simplicity of the product and algorithm also ensures there are less services and layers where attacks could be launched. Also, all platform code will be subject to audit review for any security breaches.

SIMPLICITY

Potential lenders with a basic understanding of loans will be able to create a loan or capital rental offer on the Chaingain platform in 1 minute.

There are also operations that involve crypto wallet and gaining access to stable coins and CGN token. In order to ease this process which takes place outside our platform, our team is creating easy steps and tutorials in setting up wallet and buying stable coins. This a crucial point for ease of use for the newcomers our platform is going to attract, and we committed to support our users in all journeys that involve our platform.

HIGH LEVEL PLATFORM ARCHITECTURE

Our architecture is designed for simplicity and trust and will continue to evolve to accommodate new technological developments. As trust is key, we designed the MVP on the Ethereum blockchain as opposed to a private blockchain solution or cheaper alternatives. Since gas prices are an important issue, we currently explore other options as well before going on main net but trust - security, followed by simplicity will remain key objectives of any technical development.

We believe anyone should get a good understanding of our platform’s mechanism, so here’s a simple, non-technical explanation for each of the layers that support our platform.

First, we would like to point out that the main functions of the Chaingain platform are fully decentralized performed on the Ethereum blockchain network, which means that they are not performed by a third party, which could expose the platform to malicious activity.

Behind the application there is the smart contract layer - what user have defined the loans with their terms and the platform settings are written into these smart contracts. Smart contracts are a type of contract written in code, rather than words and legal terms. We do have legal terms in the application as well, but now, in this layer, they are written in the code. This code is public, and anyone can audit how a contract is being created, how a payment is made and recorded or how the platform terms set by our company are applied - e.g.: platform commission, guarantees level etc.

In order to meet the needs of users who prefer to use a mobile application, Chaingain creates additional components that will allow the use of the platform and smart contracts without the need to have an external wallet and will help the users store their keys in a safe place.

All transactions are written and validated in a Ethereum blockchain which you can see as a huge, distributed database, where everyone validates that transactions are executed correctly. This is what makes blockchain data so secure, immutable.

CHAINGAIN ARCHITECTURE

At the core of the protocol, we also rely on two important partners:

UNISWAP - one of the most important decentralized exchange that helps us exchange the borrower’s collateral (guarantees) into the lenders’ stable coin (initial loan currency) and pay the lender back his money + interest in case the borrower has not paid the loan in time, or his guarantees are having a severe drop in value.

DIA - is a very important independent and secure partner that provides currency rates. This allows our platform to calculate how much collateral (guarantees) a borrower should deposit to cover for the borrowed amount. Also, DIA is providing the currency rates that we use in calculating potential drops in guarantees values, situation in which the loan gets liquidated, and lender gets repaid.

CHAINLINK - is a decentralized oracle network, which provides reliable, tamper-proof inputs and outputs for complex smart contracts on any blockchain. Using “Price Feed” service, Chaingain is able to get the price of specific currency and check if collateral still have proper value.

CGN TOKEN

CGN is an ERC 20 token with clear and simple utilization in the economy of our product and offer. As SIMPLICITY is one of our key pillars of our strategy, we stayed away from all mathematical complexity in designing the tokenomics because we believe that everyone should be able to become a CGN holder and understand its utilization and mechanics.

CGN use cases

Our CGN token is utilized in two core areas of our platform:

1. Platform operations:

• When creating a loan or borrowing offer, a small amount is blocked and returned after the contract has been repaid.
• When the borrower deposits collateral (guarantees) to back the loan, 5% must be in CGN token.

2. User incentives:

Rewarding our customers:

• All GAIN POOL providers depositing capital in the GAIN POOL will receive proportional CGN tokens with the amount provided. The amount could be increased during special platform promos.
• CGN token will also be provided as a reward for successful referrals, as in the beginning the platform will only be accessible via invite only based on referrals.
• First users starting a contract on the platform will also get CGN tokens based on an algorithm that will decrease in half the reward for every new 100 customers.

The team is considering additional CGN use-cases that will be implemented as the platform will grow including: governance, stacking and premium platform services.

Token information and distribution

Total supply of the CGN token is 100,000,000 distributed as follows
Token Allocation | Percent

• Private Sale: 8%
• Public Sale: 1%
• Liquidity incentives: 50%
• Team: 20%
• Operations: 10%
• LP incentives: 5%
• Advisors/Seed: 4%
• Liquidity MM: 1%
• Marketing: 1%

TECHNOLOGY ROADMAP
and LAUNCH TIMELINE