Banks provide loans at different interest rates, which may or may not suit the lender and the borrower. People often end up being rejected for loans for various reasons. Nowadays, when an industry encounters problems for its users, it turns towards blockchain technology for a simpler way out. However, lending money on the blockchain seems like an equally tricky process. While the technology provides transparency for all transactions, it doesn’t give the exact information of an individual in case they decide to run away with the money. This is why ETHLend plans to fix this loophole with their decentralized Ether lending platform.
What Is ETHLend?
ETHLend allows users to borrow and lend Ether using ERC-20 compatible tokens or ENS domains ‘as collateral’. The platform provides flexible interest rates, and gets rid of intermediaries so people can directly contact each other.
In the future, ETHLend plans on tokenizing properties, shares, and physical objects which can be lent to people worldwide. Here’s how the platform currently works:
- Borrower creates a smart contract after confirming a deal with the lender.
- Alternatively,the lender creates a smart contract and borrowers place bids on it. The lowest bid gets the smart contract.
- Both the ERC-20 token or ENS domains (by the borrower as collateral) as well as ETH (by the lender) are sent to the smart contract.
- When the borrower sends ETH (including the interest) back to the smart contract, he / she gets the token back.
- If the borrower fails to repay the exact amount, tokens from the smart contract are released to the lender.
Instead of ranking users, ETHLend deploys Credit Tokens (CRE) every time a borrower successfully pays a loan. 1 ETH loan results in 0.1 CRE, and if a user ends up with 1 CRE (10 ETH loans), they are allowed to borrow ETH without putting tokens or ENS domains up as collateral. ETHLend’s token LEND can be used for discounts and getting access to specific functions. They are also rewarded to active users and / or users who refer the platform to other people.
ETHLend’s ICO started on November 25th 2017 and ended on December 9th 2017. With a total of 1 billion LEND tokens, the sale raised $16.2 million. The token is now listed on KuCoin, HitBTC, BiBox, Binance, AEX and OKEX. The platform is already live and loans worth a total of $1 million have been traded successfully on Alpha version 0.2. The team has also followed their roadmap so far — they plan on updating the platform so that people can lend altcoins and other digital tokens in 2018. Unfortunately, users are not allowed to lend or borrow cash in exchange for ERC-20 tokens.
Overall, ETHLend has garnered positive reviews from people. The team has also managed to fulfil the promises made on the whitepaper. The platform utilizes blockchain technology by providing a secure way of lending Ethers. For more information, click the link here.
Disclaimer: Opinions expressed in this article are based on the author’s analysis. Please visit the website and perform detailed research before investing in an ICO.