Salt and Uphold Partner
Salt and Uphold have now teamed up to bring much needed liquidity to millions using crypto backed loans.
P2P or Peer 2 Peer lending has become very popular but it does come with many risks. Sites like Lending club and prosper have seen huge growth where people lend each other money in exchange for a interest rate (normally much lower than some bank would give you)
This has now bleed over into cryptocurrency and become very popular with the release of SALT.
Salt is currently valued at just $0.0446 cents per coin.
The issue I have seen with P2P lending through programs such as Lendingclub is there really is no safety net. If someone decides not to pay yes lending club with go after them a bit but you get hit with that fee. If they decide not to pay really nothing much can be done about it and those loans fall off and you lose out the money.
For example I should be expecting about a 7%-11% rate of return on the money I am lending out. But in reality after fees and defaulted loans my real rate is roughly 5% and during bad times such as a recession you might even see a negative return.
I have a feeling this will be the same direction for cryptocurrency. We most likely are heading towards a slowdown in fact I believe things have slowed down already and these personal loans are going to get hammered.
Fess is very high p2p lending.Profit return never match with expectation.
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Smart contracts should lower these covers associated with tokenized p2p loans, but I think the interest rates are still to low and history to short to really evaluate return.
Eventually you will be able to give p2p loans to a wallet that has a history of paying back, and there for demand a lower rate. That’s the future.
Yeah the big thing with crypto p2p is I expect even more of the loans to default then you would get with a traditional p2p service like lending club. There would be an even lower bar to get in and I would think very little reproductions for not paying it back.
Exactly, and because that will happen the risk has to be priced into the returns. Currently they aren't.
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