Financial services blockchain platform Provenance.io has raised $20 million in a security token offering (STO). The offering was completed as a Reg D private placement, and included different institutional investors from various sectors of technology.
Built in 2018 under the supervision of former SoFi CEO Mike Cagney, Provenenace.io is a financial services blockchain that provides commercial functionalities to a range of finance and lending firms.
What is Provenance?
The platform has been developed by Cagney’s company, Figure, a separate entity focused on HELOC’s and housing related financial instruments, has already started using Provenance to manage its loan processing, disbursement and management systems.
In its current iteration, Provenance is live and can execute loan processing, disbursement and management. But as the STO would support the company’s compliance, legal, and business development aspects, the platform plans to scale its operations to offer securitized asset management soon.
It Has Its Own Native Token
Provenance has its own native token in the form of Hash. The Hash token acts as a utility token on the blockchain where it fuels the management systems for loans and other financial assets by paying the platform’s fee. In addition to this, the Hash token also provides its holders with the power to vote on the platform’s governance mechanisms.
There are 100 billion Hash tokens in existence. The Provenance blockchain is a proof of stake platform, but Hash tokens cannot be created through rewards. They can’t also be destroyed or depleted with use. Instead, the Provenance blockchain is built in a manner that the more Hash tokens are used on the platform, the more influence its usage would have on the token’s overall value.
The STO also brought the announcement of Provenance and its management board of Provenance Blockchain, Inc. (PBI) as separate entities. This way, Provenance would continue operating as a blockchain platform, while PBI will manage its administrative operations.
Provenance is Being Used Across a Number of Platforms
Provenance is not only being used by Figure. It is currently being piloted and utilized by a host of financial institutions including banks and funds. The aim for Provenance is to make the handling and management of financial assets easier, especially for assets such as loans that prove difficult to manage over conventional platforms.
For this, the Provenance platform provide special mechanisms that range from the initiation and the sale of the loan, and then to its disbursement and repayment. Since everything is managed on a non-modifiable, distributed ledger over blockchain, the process is said to be transparent and secure.
Utility for Both the Lending Firm and Its Customers
This management, transparency and security works in the favor of the company, which could ensure compliance across multiple fronts. Whereas, for the customer, it ensures that their information is safe and their data is being processed in an efficient manner, cutting processing times across multiple aspects.
These benefits have been detailed in a white paper that is available on the platform’s official website. Among other points, Provenance provides its findings in the white paper on how blockchain could help with the current lapses in loan processing and help with the efficiency of systems such as credit ratings.
With the processes that Provenance is introducing for the lending industry, the platform aims to become the primary platform of choice for it. Given that it is yet to introduce its security offerings over the platform. The platform is expected to become more useful for additional parties over time.