1. Executive Summary
Hoc’s objective is to unlock the value of Real World Assets (RWA) on the blockchain by integrating existing economic infrastructure with distributed ledger technology. An RWA collateral pool will be leveraged to generate HGBP, a GBP stablecoin, on the Hoc Protocol.
Initially the Hoc Protocol will accept unencumbered prime London real estate. Over time, the categories of accepted collateral will broaden to include additional RWA, fiat, and fully digital assets, so as to expand the Hoc ecosystem.
The Hoc Foundation feels that establishing the Hoc Protocol will be critical in addressing the existing pain points within traditional finance, whilst enabling greater adoption of the blockchain ecosystem.
Existing centralised financing (CeFi) avenues are characterised by:
Lenders’ reluctance to and the slow speed with which they decide to lend.
High and unattractive financing costs, whereby Real World Asset (RWA) holders are increasingly discouraged from borrowing money.
Deposit rates unable to compete against rising prices – and no sign of this changing soon.
Record money printed by global central banks and thus record debt/GDP and debt corporate ratios.
Significant barriers to smooth, low cost international payments.
Lack of a distribution of value and control.
The Hoc Protocol seeks to:
Transform and disrupt the way in which RWA holders can access lenders – by allowing them to do so directly, peer-to-peer, through a Decentralised-Finance (DeFi) platform.
Hasten the borrowing process.
Achieve community governance, rather than that of a single centralised authority.
‘Print’ money only where such money is significantly over-collateralised and destroy it once such collateral leaves the ecosystem.
Restore access to competitive but sustainable yields.
Smoothen and cheapen transactions across borders.
Distribute value across a community, rather than centralising it.
Align the appreciation of that value to the growth of the community.
Additionally:
the majority of the stablecoins that have emerged up to this point, forfeit the core value proposition of blockchain technology: adoption of a common infrastructure without a central authority or administrator that may abuse its influence.
Decentralised finance is still in the early stages (see ‘Dai’ in the chart below, the current largest decentralised stablecoin) and without a fundamental connection to real-world assets, existing decentralised stablecoin protocols run risk of default due to the rapid loss of cryptocurrency value, which happened in March 2020 and May 2021 for DAI.
This Whitepaper sets out how the Hoc Foundation plans to make these goals a reality.
The technology and legal infrastructure is available for RWA owners to safely and securely convert their physical assets into Non-Fungible Tokens. Whereas cryptocurrencies consists of multiple copies of a single token, NFTs exist as individually unique assets. This uniqueness makes them ideal instruments to capture a real world asset on the blockchain.
1.1 NFTs - the Great Enabler
Solutions - regarding both the technology and the legal infrastructure required - now exist to enable RWA owners to safely and securely convert their physical assets into NFTs. NFTs, NonFungible Tokens, exist as individually unique assets, unlike cryptocurrency where there are multiple copies of a single token. This uniqueness makes them ideal instruments to capture a physically real and unique asset on the blockchain.
Leaps and bounds have been made regarding the implementation of legally sound systems and relevant controls that enable RWA owners to ‘custodise’ their RWA with an independent party, and crucially, allow them to confer the right to title of the RWA into such an NFT. Research indicates that such a conference of traditional, immensely powerful property right into a blockchain interactive medium (the ERC standard) could truly open a '$326tn' gate and finally allowing stable physical property to have their total value and rights represented in a
Additionally, the RWA is ‘locked’ (cannot be transacted) for as long as the NFT that represents it exists. From there, the owner may choose to lock up this NFT in a DeFi application (like the HoC Protocol), for example to complete a process where the effect is releasing liquidity from a physical asset directly onto the blockchain. In a world-first, it is these right-to-title NFTs that will form the collateral pool from which our stablecoin, HGBP, will be minted.
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