Necessity and Opportunity Crypto lending


The popularity of cryptocurrencies and blockchain technology is growing every day. More and more people are starting to trust technology rather than precious metals or fiat money. At this point, the number of unique Ethereum addresses has grown to 78 million, while Bitcoin’s to 42 million.

In this regard, there is always a need for the qualitative development of the cryptocurrency market. One of the most important elements of this development is cryptocurrency loans.

Crypto lending platforms (decentralized and centralized) have already proven their effectiveness and reliability in the crypto-assets market. The functionality of these platforms is gradually expanding.

One newcomer to the market Squilla has an ambitious goal to provide High-LTV loans (80% to 150%) in the Q2 of 2020. Right now they have built an infrastructure and system to deliver collateralized loans and in the process of obtaining additional licenses.

You can access beta of their platform at Squilla.Loans. They are well-positioned to achieve their goal since they have a strong team with years of experience in fiat lending markets.

Crypto-leasing platforms have made a great contribution to progress towards an efficient cryptocurrency market. And this contribution is not limited to increased liquidity of the cryptocurrency market, but also includes the most important features:

1. New approaches to fiat gateway.

Promoting the emergence of new ways to exchange fiat to crypto. At the same time, crypto-lending platforms help accelerate the process of exchanging fiat money and cryptocurrencies, as well as finding new solutions to minimize transaction costs.

2. ICO/IEO Treasury.

An additional opportunity for projects that have attracted funding on crowd sales in cryptocurrency can optimize spendings while earning an extra return on their holdings. This is achieved in a convenient way by secured crypto loans, in which project teams will be able to balance currency and operational risks.

3. Stable revenue.

The source of stable income in stablecoins. Institutional investors, like many conservative investors, are not interested in digital assets because of their high volatility; instead, crypto-lending platforms offer fixed income in stablecoins tied to the US dollar.

4. Minimizing tax liability.

Borrowing against crypto assets is not a sale, thus no tax is due on the transaction. The investor can, therefore, borrow USD against their crypto, continue to HODL and pay less in interest than the taxes on the capital gains.

5. The base of unsecured crypto lending.

Data aggregated during the issuing of collateralized loans is the basis for the formation of a complete system of unsecured loans in digital assets. Solving issues of digital identity and the establishment of full credit scoring will one way or another be made on the basis of accumulated data, acquired experience and proven mechanisms of crypto lending platforms, both centralized and decentralized.

6. Increasing market capabilities.

The development and scaling up of credit relations in the digital world means increasing liquidity in the crypto-assets market, the emergence of new players and technological solutions that in one way or another make the market more decentralized, and, thereby, investment attractive.

The list of additional functions of credit relations does not end there. The new functionality will be added over time.

An important step forward is the emergence and popularization of p2p platforms (along with b2c), where each client can register, provides an additional opportunity not only to save crypto assets and receive additional funds as a Borrower but also to earn as a Lender. The availability of this credit resource will always be in demand, regardless of which peer-to-peer network is now the most popular.