Verso Network Overview

Imagine an insurance company that offers 3-day travel insurance through a third-party remittance company servicing migrant workers. The product is offered as an add-on option every time these migrant workers send money back home. This is a risky business strategy as it depends on third parties, other industries, and the competitive edge and longevity of those partners.

Imagine custodial wallet providers that need to meet regulatory requirements and are often restricted in terms of data they can share with third parties. While “open-banking” alleviates some of these challenges when it comes to making payments or accessing balance information through third parties, there is no standard for the direct integration of other financial services, such as insurance products.

Imagine Decentralized finance (DeFi), a blockchain-based form of finance that does not rely on central financial intermediaries and instead utilizes smart contracts on blockchains. Despite DeFi’s many advantages, it requires a significant amount of knowledge around blockchains and cryptocurrencies to safely access these products. As a result, promising innovations remain out of reach for millions of people.

Do you notice a pattern here?

Three colossal industries – in a way, unable to talk to each other. The insurance industry, unable to tap a massive market of small insurance users. Wallet providers, unable to integrate with insurance providers and reselling their services with a margin. High-yielding DeFi products whose mechanism and user interface are too complex for a mom-and-pop type of user.

An opportunity lies in bridging these three colossal islands.

Meet Verso, a decentralized marketplace for the regulated financial service industry. Verso provides financial service providers with access to previously inaccessible consumers. Verso also allows those consumers access to exciting new product offerings through whichever wallet they already happen to use.

How does Verso work?

As complex as it sounds, the verso mechanisms can be explained through a series of simple steps. Let’s take the example of a financial institution:

  1. A financial institution such as a bank develops a new service offering such as a microloan. It wants to offer the product to a segment of users that match exact criteria, such as age, income, geography, etc.
  2. The bank defines the campaign criteria and launches a campaign on the Verso network
  3. Based on the input factors of the product and campaign, an algorithm will calculate the price for the placement of the product inside the Verso Network
  4. After validation, the financial institution prefunds the product pool with USDC
  5. A wallet provider logs in to the Verso network and chooses to fetch a verified product and display it to a part of his customer base that matches the campaign criteria
  6. A consumer may decide to buy the loan product now made available to him via his e-wallet’s dashboard
  7. The wallet provides sends the customer info to the bank. The bank may do a last check of the customer data before approving the loan. The loan amount itself is settled in USDC from the product pool to the wallet provider for distribution.
  8. At the end of the loan period, the smart contract invokes a debit request to the wallet provider.

Now we can get a better idea of the mechanics, right?

The Verso Network is not involved in the mechanics of the loan itself, apart from having visibility through the smart contract. When all clauses of the smart contract are fulfilled, the smart contract is automatically terminated and the loan agreement is closed.

But wait – how do we manage to ensure compliance amid connecting several, highly regulated industries operating internationally? Verso maintains strict regulatory compliance by ensuring that products are only displayed to consumers who fit the eligibility criteria.

The Verso Network is powered by the VSO token, issued on the Avalanche C-Chain. VSO is a utility token to access network services and reward network service providers. VSO tokens are also required to participate in community governance to continuously develop the Verso ecosystem.

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