Ethlend: Democratizing Lending

MarketCap: ~$300,000,000 (Rank:112)

Circulating Supply: 1,016,941,081 (15,000,000 more in an Airdrop on January 19th)

Current Price: ~$0.30

Volume: $26,500,000

Exchanges: Binance, Bibox, Kucoin, Gate.io, HitBTC, OKEx, Etherdelta, Coinbene, AEX, IDEX

Competitors: SALT, Elixir (ELIX), Ripio

Type of Token: Utility Token

Price Trends: Very Strong finish to 2017, parabolic growth around the 8th of January after news that they had done over $1,000,000 of loans on their Alpha version and that it would be listed on OKEx on January 9th.(4th largest crypto exchange in the world). This was followed by a sell-off (buy the news sell the hype) and then followed by FUD from South Korea. I believe this is a pretty solid correction and that the price trends are healthy. 

Recent News:

• Airdrop of 15,000,000 LEND to all those with Eidoo wallets installed before January 10th, Airdrop will occur on the 19th.
• January 9th: Announced Partnership with Enigma (ENG) for Smart Contracts on their decentralized lending platform
• January 8th: Announced $1,000,000 of lending was completed over their alpha network
• January 5th: Partnership with Swissborg (ICO just completed, raise 50,000,000 CHF)

Concept: Ethlend seeks to create a decentralized lending platform between cryptocurrencies. The traditional lending platforms are controlled by centralized authorities who get to determine the price one pays on a loan. There is an extreme inequality between lending platforms across the globe. Someone in Brazil could pay up to 30% on a loan while European citizens only have to pay 0.5-5%. This is due to centralized banks, politics, and governmental monetary policies. Decentralization can give more liquidity to markets that are in need of it. Subjective assessments of borrowers based on geographical locations are obsolete as an objective assessment of their collateral before placing a loan request. 

The lending will be completed in Smart Contracts, which means that ETHLend will not hold any of the assets, rather they will be on the blockchain until the time period is complete or the repayment is processed. 

Use Cases:

Buying other cryptocurrencies that you think will appreciate in value: Imagine you currently hold some VEN tokens. You love the project and you want to hold it long-term. However, you find out at the XLM (@$0.60) has an upcoming announcement and you really think you can make a profit. ETHLend would allow you to use your VEN tokens as collateral (I have 25 VEN at $6.00 each= $150). You can offer your 25 VEN as collateral in exchange for a little bit less value in ETH, and then use the ETH to pay for Stellar Lumens. Say the lender offers you $120 of ETH. If Stellar lumens is $0.60 would get you about 200 XLMs. Now the price of Stellar Lumens goes up to $1.00. Your 200XLM's are now worth $200 instead of $120. You now go back to your lender, pay back the initial ETHEREUM value ($120) + some interest. You get to keep your 20 VEN's which have appreciated in value to $7.00, making them worth $140, while also now possessing ~70XLM for $1.00. In total you managed to make $90 from this entire exchange. The lender is given some of your profits of XLM in terms ETH. It is a win-win situation (assuming the coin does what you expect it to do). 

What happens if the borrower can't pay back the collateral? Lets imagine that XLM nose-dives down to $0.30, the investor was wrong in his judgement. What happens in this situation? His 200 XLM are now worth $60.00 and the borrower no longer has the money to pay back the lender. The Lender gets to keep the borrower's 25 VEN. As he considered the judgement a fair one, the lender is now in possession of 25 VEN, while the borrower is stuck with his 200XLM at 0.30. 

Lending for ICOs: The biggest market this could actually benefit is ICOs. ICOs could ask for more ETH in return for a specific amount of their tokens. This method would give the startup the ability to receive funding of their ICO while maintaining their tokens

ETHLend solves some of the issues of the traditional lending markets by truly freeing them from centralization and poor monetary policy. Interest rates are decided by the people on the market, rather than a central bank. Furthermore geographical location is no longer an issue, everyone in the cryptosphere will have access to low interest rates. As the smart contract is done on the blockchain it is transparent and visible to the public. 

What Terms can be created in the Loans?

• Installments and installment periods can be changed to fit the needs of the lender.
• Premiums are agreed upon before writing 
• Can use Cryptocurrencies, currently 50 ERC-20 Tokens are accepted along with FIAT-pegging, in the future ETHLEND hopes to Tokenize things, allowing for pledging of real property. 

What ERC-20 Tokens can be used as collateral?

LEND, EOS, Qtum, OmiseGO, Maker, Augur, TenXPay, Golem, Status Network, Kyber Network, Digix Global, Basic Attention Token, Decentraland, Iconomi, Funfair, ZRX, SAN, GNO, Monaco, MetalPay, Civic, Storj, Bancor Network, Ethos, Edgeless, SNGLS, Aragon, Wings, RLC, AST, Melon, CFI, Trustcoin, Firstblood, Taas Fund, District0x, Numeraire, Xaurum, Humaniq, Tokencard, Matchpool, Time, AdToken, SWT, Etheroll, NimiqNetwork, Lunyr, Bcap, Pltuon, and vSlice. 

Questions regarding volatility of ERC-20 Tokens in Loans:

ETH and ERC-20 Tokens are subject to volatility. One way to counteract this is by pegging your loan to a USD value. In this case if the value of ETH were to increase, the borrower is only subject to pay the $100 value in ETH +the agreed upon premium.

Benefits of Holding LEND tokens:

Overall the benefits of holding are the fact that they will appreciate in value over time and they reduce fees of lending and borrowing.

LEND holders receive 25% discounts loan request and loan funding fees. Ethlend uses the profits from the fees to buy back ETHlend tokens and reward borrowers and lenders on their platform. 

LEND is similar to BNB (Binance Coin), it isn't needed to use their platform but it decreases the value of the transactions are done. 

The Team: The team is comprised of 22 people which comes off as extremely impressive. The founder does not have any experience in blockchain or cryptocurrencies, however does has a Law degree and a major interest in Smart Contracts. Many of the teammates have experience in cryptocurrencies or financial markets. Some of the major Team players are below

Stani Kulechov: Studied Law in Helsinki, not much in terms of blockchain development or experience in blockchain. 

Anthony Akentiv (Blockchain developer): 12 years of C++ experience

Notable Advisors:

• Jon Matonis: Founding director the Bitcoin Foundation, having worked for CoinDesk, Visa, and Sumitoso Bank
• Wulf Kaal: Previous work in FOREX for Goldman Sachs, Currently a professor of law
• Robert Viglione: Co-founder of ZenCash ($165,000,000 MarketCap)

Social Media Presence: 

ETHLend social media presence is phenomenal. Developers are constantly answering questions in their subreddit. Their twitter feed is very active giving updates on when new loan requests are made on their alpha site. Their Twitter has 25,000 followers and their subreddit has 4.1k subscribers. 

Roadmap for 2018:

Q1 2018:

• Ethlend will relocate to Switzerland due to its sandbox regulations on blockchain technology
• Airdrops for Active Lenders and Borrowers: They do this with the hopes of increasing user adoption and adding more volume to the loan book.
• On-Demand and Crowd Lending 
• Decentralized Credit Rating

Q2 2018:

• Penalties for Late Payment and Refinancing: Measures added to motivate repayment of late loans. 
• Lending Bitcoin
• Using LEND gives at 25% discount
• Gateway for Decentralized Providers (Uport, Civic)

Q3/Q4 2018:

• Protocol to enable AI and Big Data to assess Credit Risk
• Prediction Market to Assess Credit Risk
• Lending of other altcoins and tokens

Product: ETHLend currently has a working product. It's Alpha Net can be found here.

Partnerships:

• Enigma (ENG): The partnership aims at bring data and computational privacy to their decentralize lending platform
  • ETHLend will use Enigma's Secret Contracts to keep sensitive data private such as credit data.
  • ETHLend also hopes to use Enigma's Catalyst, a data driven crypto asset trading platform to expand their ETHlend ecosystem.
• Swissborg: wealth management company will use ETHLend in investment strategies as a borrower amongst other things. CHSB will be released as a collateral on ETHLend platform once the asset hits exchanges.
• Eidoo: Performed the ICO token sale on their platform. Eidoo is a platform aimed at simplifying the storing of crypoassets on their user-friendly wallet. Their wallet is currently available for download on the google app store.
• Bloom: Bloom is a decentralized scoring platform on the Ethereum network. It recently finished its successful ICO with $40m raised by over 7,000 participants.
• Digix: Digix attempts to tokenize gold on the Ethereum network. Their marketplace is currently in it's BETA version. 

Competitors:

Salt:

MarketCap: $661,000,000 (#59)

 Salt's main use case is for FIAT loans using cryptocurrencies. Salt is far more centralized and much more like a traditional bank than LEND's platform. SALT's lending doesn't happen on the blockchain and only uses digital currency as collateral. LEND has now started doing USD loans based on ETH. This comment on reddit really caught my attention. SALT also requires you to hold a certain amount of SALT before being able to create a loan on their platform, which is not up and running yet. NOTE*: I am not trying to spread FUD, if I am misunderstanding something please correct me in the comments. 

Elixir:

Marketcap: <$50,000,000

As far as I can tell, Elixir is focused on pool lending/fundraising for projects using cryptocurrencies as collateral. I actually really enjoy this project, it started without an ICO, so the two team members could focus on creating a working project. They are currently ahead of their roadmap and have revamped their website. They have a working product too, and maybe with some bigger exchanges/partnerships their project will gain more traction. NOTE**: I have held small positions of this project before selling ATH.

My Opinion:

I am very optimistic on the ETHLend project, their alpha net looks to be a success and they have been gaining traction through partnerships and getting their name out there. Their subreddit and social media is extremely active and I think they can catch up to SALT as they are truly decentralized. The project aims to solve a real world problem (inequality in lending) which the blockchain and ethereum network has provided a solution for. The team is big and constantly coming out with updates, and if they are able to achieve everything on their roadmap, great things can come of this product. I became aware of the product after the Enigma partnership (I am invested in that project). They have a number of ERC-20 Tokens that can be used as collateral which allows for a lot of investors to use their platform. 

I have received a small portion due to the Eidoo airdrop but have not purchased any with my own money. I may do so in the future if the project continues to progress on time. 

I am not a financial advisor, I am simply providing my research into this coin and may add updates as I do more research into the competitors. If there is anything that I am misinformed about please leave a comment as I would like to be enlightened. As always do your own research on top of the research that I have provided before making your final decision.