Have you personally used blockchain technology? And I'm not writing here buying cryptocurrency, sending them to your wallet or performing stock exchange transactions. Have you ever wondered what it would be like to feel the power of decentralization and actually take advantage of this fantastic, future technology? Now you have the opportunity to check it out in person. I present to you a project named ETHLend (LEND).
What is the ETHLend platform?
ETHLend - it is a Swiss-registered, created by an international team of approx. 30 specialists - a p2p lending platform, the purpose of which is to match two parties to the transaction: borrowers and lenders, by concluding an agreement based on a smart-contract network Ethereum. It allows you to take a loan in the form of the ETH or LEND cryptocurrency - previously defined by the repayment terms (a form of security with the currently accepted tokens on the platform) ERC-20 group - at the moment it is over 150 of various cryptocurrencies, interest value, duration). It looks like the following graphic:
How to borrow funds on the ETHLend platform?
To become one of the parties to the transaction - that is, to take out a loan or to borrow some money (let us consider the case when we want to borrow funds from the lender), you should do the following:
- Install and run the application-wallet that works with the platform Metamask as an addition to the browser, and then create a password for the wallet, where the Ethereum network address will be assigned
- Connect to the ETHLend platform
- In this way, we move to the main page of the platform, where we can choose to show us existing loan offers or issue - a proposal that is set out in our terms - which will be expected to be willing to implement it. It looks like this:
Let us consider the case when we want to take advantage of this loan offer:
How to read it?
Someone proposes to lend us 3.7 ETH on 30 days with interest 2.7% and as a security requested ok.125 Binance Coin (BNB). When we accept the terms - about 125 BNB will be sent from our wallet as collateral, and in return we will receive 3.7 ETH on our wallet.
Does it pay off?
Considering current ETH and BNB prices by cryptocurrency ranking - this is a loan proposal for about $ 750 secured with about $ 1200 - where the interest is about $ 20. This means that if the borrower does not return the loan value (30 ETH) + 3.7% interest after 2.7 days - the lender keeps the BNB tokens. However, when we repay the loan with interest (we can do it at any time without waiting for the end of the contract) - our security is sent back to our ETH address, from which we previously made the deposit (everything is automated and secured with a smart-contract with the Metamask wallet) ). Statistically - taking into account all costs - a loan on the ETHLend platform - $ 10000 per year - costs us about $ 300, which costs us only $ 25 per month.
Tips and options
- We can be a borrower who issues a loan offer or use an existing offer
- We can be a lender who issues a loan offer or use an offer already issued
- Monthly interest - taking into account past, historical transactions - ranges from 1.5 to 5% (all such helpful data can be checked on the platform by clicking on )
- We can get a loan to 75% of the value of the security deposit
- The lender is secured against an excessive fall of the token protecting against the repayment deadline - through liquidation at the level calculated by the system algorithm, in the example discussed above it looks like this:
In practice, therefore, when the BNB price drops by approx. 40% during the loan agreement, the lender automatically collects the tokens
- Depending on our choice - you can choose loan repayment options by donating the same amount currency (ETH or LEND) or converted to the current USD exchange rate (I would personally choose the second option, because we may have a situation that the ETH rate increases a lot and therefore we have to pay back much more than we borrowed (of course, if the ETH value decreased - we would earn)
- The loan can be taken or granted for the period from 1 to 12 for months
- In the near future, the team intends to introduce serving loans BTC
Usable value of the LEND token
- when we take a loan in LEND - there are no fees
- when we pay off a loan in LEND - we pay half the fee
- using the LEND token as a security deposit - we can get a loan of up to 70% to 75% of their value
- participation in airdrops and campaigns (20% of profits from transaction fees on the platform are distributed between lenders / borrowers in LEND)
What do I need it for?
You can ask yourself this question. Well, how many people - so many reasons for loans. But imagine a situation where we bought tokens of some projects with a view to taking profits from their sale in the long term, which are on our wallets and waiting for a trend change or global adoption. At the same time, we see investment opportunities such as trading on type exchanges Binance, purchase of an interesting ICO, trading on leveraged exchanges or we simply need money urgently (we can convert it into conventional currencies). So we can mobilize this capital - without selling our projects at a lower value - for a small interest. We can earn on this interest in the same way by granting loans to someone - this way we have a chance for additional, passive income. It is a very interesting alternative to the financially blocked so-called Hodlers.
Such a way of realizing loans gives us new opportunities. All this without the participation of intermediaries such as banks, high transaction fees, no unnecessary paperwork, long waiting for the decision to grant a loan, without verification of documents, virtually anonymously - here and now. That's what decentralization gives us. And the future of this type of platform? According to experts, quite soon will come such times that it will be possible with a few clicks, e.g. in Poland, borrow money from someone from Japan to build a house in Belgium.