Let me start with a scene that everyone is familiar with. As BTC holder, as a believer, I won’t run even if market crashed. Nevertheless, every now and then there are chances to get in early on some quality projects. Suffering from insufficient cash, I missed bottom opportunity. If I could borrow USDT for six months period on a reliable platform with BTC mortgage, I can reap gains without missing other projects. Meanwhile, smart contract based “interest payment” is anonymous and privacy protected which ensures manipulation risk-free.
Actually, current situation reveals two obvious pain points: Cryptocurrency holders have occasional funds needs contains short-term operation, wage payment and electricity fee. However, they don’t want to sell assets due to long-term value they believed. Furthermore, lacking of investment platform like fiat market results in cryptocurrency holders put their digital assets in wallet.
Compared to the same period last year, by May 30, 2018, the total value of the global digital cryptocurrency has soared nearly 30 times, with more than 30 million investors and more than 3 million domestic investors. According to relevant data, the value of global blockchain digital currency will reach more than 10 trillion US dollars in next two years, and the number of digital currency investors will reach more than 200 million US dollars. Soaring market value directly results in an influx of investors. Therefore, the blue ocean market of blockchain assets is destined to explode completely. There is no doubt that at present, digital currency lending business has gradually become significant part of blockchain cryptocurrency industry ecosystem.
However, such boom definitely will make users confused and waste their time. Hence, I assess four niche players: Libra Credit, ETHLend, SALT and LendChain.
Two points I take into consideration for comparison, one is To C and To B experience, the other is opportunity to lever market to become oligarch. Therefore, following 10 parameters are mainly carried out in terms of product type, loan amount, platform background, capital scale, team and platform size.
LendChain is a digital assets finical service platform.
To financing business, LendChain provides Mortgage and credit financing services, supporting BTC, ETH, EOS, GXS, QKC and other mainstream crypto. To investment business, LendChain provides fixed income, floating income and other investment products.
Compared with Libra Credit, ETHLend and SALT, LendChain is a latecomer. But, June 19, there was a sudden explosion. The reason is that LendChain started public test for 1.85 million Blockcity residents and launched BTC/ETH/GXS based financial products which has 30% annual return. Aroused 1.85 million Blockcity residents’ enthusiastic instantly. As a result, there were two major events within crypto circle last week. Dark horse exchange – Fcoin corner overtaken and was suppressed. LendChain 30% annual return product was spammed. LendChain enjoys the cold with its back against GXChain. Off-the-shelf tech, model and traffic. Most importantly, credit data of GXChain and lending records on LendChain uploading forms a natural “credit ledger” as data are tamper resistance and real. We should know that whether current blockchain financial platform or traditional lending platform, “credit ledger” is undoubtedly the core competitiveness.
For users, the most intuitive thing is mortgage rate. For example, 50% mortgage rate means 20K dollars mortgage for 10K loans. If your previous record is good and you authorize LendChain to access your credit data on GXChain, we will evaluate your credit rating and give you a 60%, 70% or even 80% mortgage rate.
For products, LendChain can currently provide three types of digital asset financial products:
1. Investment product – crypto based Yu’E Bao
Users can invest their cryptocurrency (BTC, ETH, GXS, EOS,QKC.) on LendChain. LendChain will cooperate with specialized investment and research teams. Products includes mortgage & credit loans, quantitative fund, private equity fund, mine project and big customer market management. LendChain will provide different periods products and interest rate fixed products. Users can choose what they preferred. It is worth mentioning that LendChain has partnered with several famous investment institutions. With rapid development of blockchain industry, mainstream crypto based token raise is a rigid demand. Projects need fiat to turnover and they cannot easily sell ETH. In this case, LendChain platform is undoubtedly very helpful.
2. Financing product – mortgage loans
Crypto holders can pledge BTC, ETH, GXS and others on LendChain to obtain USDT. Afterwards, more crypto like EOS, BTC and can be ETH mortgaged. LendChain requires issuer top-up crypto as collateral. Debit will fail once price of collateral falling too much which means investors’ interest can be guaranteed.
3. Credit loans
It is well known that GXChain owns reliable data market place and consolidates massive credit data. As its partner, LendChain can provide credit loans service for Blockcity users. In real life, we have to sell crypto for fiat to go shopping. But this goanna be a sharp loss once crypto boomed. To solve this, Libra Credit provides crypto collateral based low-interest fiat lending services. Platform applies Ethereum based smart contract and introduces AI neural network innovation risk rating system to decrease personal credit risk.
The lending process is simple:
2) identity and credit assessment
3) notification confirmation
4) mortgage payment: applicant shall deposit token in Libra Credit’s wallet or designated address and guarantee that it will not be embezzled
5) loans receiving
Libra Credit customers can get a loan right away by entering the type and amount of crypto they own. Platform will automatically review customers’ identity information, evaluate crypto value, convert into fiat and calculate maximum loan amount.
ETHLend is a distributed lending application running on Ethereum network.
If you need ETH for ICO or other investments, you can mortgage with ERC20 token or ENS domain which you are not willing to sell. Just pay interest to obtain ETH and repay capital and interest at maturity. Once repaid, smart contract returns collateral and both creditors and borrowers are rewarded with CRE.
The advantages of ETHLend can be summarized in three aspects:
1) Decentralized lending platform with adjusted interest rate and ranking mechanism, everyone can choose the best market interest rate for lending or borrowing.
2) All lending processes are implemented through smart contracts and inquired are made on Etherscan.io, which is open, transparent and secure.
3) Only mortgage loan, the mortgage will be transferred to lender in case borrower does not repay.
Currently, ethlend has been launched, and in the official medium, 3000eth of loans were made in February. Twitter has 44,000 followers and telegram has 19,000, community is still active. However, while ETHLend is now well known, it is limited due to its name and only ETH business.
SALT, founded in 2017, is a member-based lending network that allows users to secure cash loans using its blockchain assets. On SALT, users can use their digital currency as collateral for loans.
SALT mainly solves user needs from three aspects:
1) convenient, fast and low-interest fiat loans;
2) digital assets used for mortgage do not change their ownership, maintain investment attributes while increasing cash liquidity;
3) asset mortgage is not for sale and can offset tax events.
Its mortgage rate can reach up to 80%.
Furthermore, risk control is also doing well, such as borrowers who pay off the loan on time and mortgaged digital asset return. If reimbursement defaulted or collateral value changed, automatic mortgage management system will adjust balance and automatically performed. Nevertheless, SALT asks information verification and approval is only one of requirements. Users have to purchase membership. Members are set to three levels, with different functions and powers. Ordinary is $10,000 limited, premier is $100,000 while enterprise is $1 million with loan terms customization.
In practice, lending transactions and other types of financial services provided by Libra Credit, ETHLend, SALT and LendChain need to be done on blockchain. As a result, each user’s assets and transaction information contains locking, borrowing, investment, reimbursement, overdue, etc will be recorded and operated by smart contract to realize undeletable and tamper resistible. Without artificial operation process can avoid low audit efficiency and running risk of centralized P2P platform.
The most fundamental difference between SALT, ETHLend, Lendchain and Libra Credit is SALT’s funders are not ordinary investors. For example, ETHLend and Lendchain support ordinary investors while SALT prefers institutional users. Compared with others, the rising star LendChain has two moat level advantages. First is its high-dividend financial product “Yu’ebao”. Second is “credit ledger” of GXChain. Therefore, although not that easy, it is possible to build a digital asset financial service platform which has 10K DAU and can carry massive asset flows.
In recent years, as digital currency market heats up, digital currency has been attracted common people’s attention and supported by tens of millions of investors. Digital currency holders treat it as real estate and are willing to hold for long term. Blockchain is conducive to encryption currency credit in financial field.
Therefore, there is a huge market for financial platforms like Libra Credit, ETHLend, SALT, and LendChain that offer decentralized smart contracts and lending solutions. Meanwhile, four niche players in this subdivision all have their own advantages and play important roles in this ecosystem. Their future achievements are truly worth waiting for.
Company Name: Hangzhou LendChain Technology Ltd.
Contact Person: LendChain
Email: Send Email
Address:Ke Space, 5/F, Wantang Mansion, Wantang Rd, Xihu Dist