Cryptocurrency is introduced as a new product in the financial sector which was initially run by relevant institutions like banks for the purpose of lending and borrowing of capital.
In the past recent years, cryptocurrency took the world by storm and companies started making use of it as a replacement for the fiat currency they have been using for years. There is a whole new space developing in the business sector for the peer to peer interaction with the use of cryptocurrency. Fuad Ahmed, a currency trading expert is exploring the avenues of the cryptocurrency for lending and borrowing in businesses. In the following paragraphs, Mr. Ahmed is going to analyze several options that are available for borrowing and lending.
Among the several options available that Fuad Ahmed has collected for his readers, there is a platform for loan supported by blockchain. The platform can be used with users making a purchase of ERC 20 SALT tokens to become members and put blockchain backed assets like bitcoin in the account. The account holders can then borrow money from the web of lenders on the platform. There are no preconditions for payment, borrowers get their crypto back as soon as the loan is paid.
The platform SALT being a new one in the market, doesn’t possess enough liquidity to lend out loan to every borrower that requests for money. Therefore, when the available amount is money is all lent out the borrower has to wait until the platform has it back in the account or a lender with money is available.
One SALT token is priced at $25, which is sold within the system. these tokens can also be found on several other exchanges for a price as low as $4. The membership in the system is given through payments made by the SALT system. There are several tiers covering different price ranges on which this system is built. The lowest is 1 SALT, that pays about $10,000 and the highest is 100 SALT that provides the capacity to borrow up to $1,000,000.
There is an interest rate of 10 to 15 percent on each loan, varying per the conditions set between the lender and borrower. Borrowers can apply for loans and choose the terms and conditions they find suitable for themselves in correspondence with the system and the lender.
The members on the SALT platform are all registered investors who have been verified by the SALT Lending Suitability Test. The loans cannot be transferred through blockchain, but the conventional methods of financial transfers are applied to them.
Unchained Capital is almost like the platform SALT, which allows issuance of loans against bitcoin capital. The details of this are easily available on the website. The benefits of this software are listed as follows.
The interest rate is lower and is 10-14 %.
The option for term renewal remains open until the completion of 24 months.
Loan to value ratio remains to be 50%. One can borrow half the amount of deposited capital.
$1 million can be borrowed without a credit check.
Monthly payments can be made on interest.
The CEO Joe Kelly makes the claim that Unchained Capital has been working with small institutions and investors. They aim for collaborations with partners than going to look towards capital investment from the investors. They are currently lending over $10 million with the same policy.
EthLend works as a free-market facilitating platform. They provide an opportunity to the borrower and lender to connect and negotiate the terms and conditions of the contract. The platform solely trades in Ethereum. The borrowers on the platform have to abide by the rules set in the smart contract.
This setup is very much similar to paper currency lending options. It works like a bank, the difference is it lends tokens and gives various discounts. The purpose of EthLend is to take advantage of the usage of their system.
Fuad Ahmed recommends another platform that uses blockchain technology for loan contracts. Othera deals with the management of risks by tokenizing the repayment cashflow. The company was in the news for past one year, but no development had been seen on their website. Some have even speculated that Othera is working towards collaborating with the real estate lending company Lendhaus. However, no update on the news has been seen on Lendhaus website either. The Bitcoin magazine is also looking for a response from the Othera, but haven’t received any yet.
Still, the platform is available in the market, so customers can consider this one an option too.
Fuad Ahmed for his valuable readers collected some fact-based research material and decided to guide the readers through his analysis of the lending and borrowing options with the blockchain.