ETHLend- Easy & Fast loans by backing crypto assets

The people have constantly traded merchandise, resources, products with different people since the beginning of human advancement so as to satisfy their requirements. The requirements of a person is multi-dimensional and that is the reason people must be reliant upon others and that reliance is likewise a subject of being social. With the progression of time, the areas began being managed, concentrated, where this trade ends up controlled by certain methods. However, one thing still remains and will dependably remain that is trade of products, items, values and so forth. It might turn out to be increasingly cleaned as we advance in human advancement.

At whatever point there is reliance, there will be a trade among people and that trade sets up a commercial center. That further gets cleaned in to business with the progression of time. Business is a sorted out type of trading merchandise, resources, values, cash and so on. As we are in a time where everything experiences with a valuation, the terms cash or money turns out to be increasingly pervasive. As the money is increasingly predominant, the business is additionally progressively driven with money. Despite what you trade, that will be measured upon with money. So money further raises numerous measurements and one of such measurement is a credit. The purpose of a credit could be to buy a service or an experience or an asset or goods or commodity etc.

Out of the numerous sorts of benefits we have in genuine world, crypto resource is one such resource which is rising essentially. Individuals have begun to understand that inherent inflation of paper money is doing a whole lot of nothing to the general public and they have understood the value of crypto resource with a blockchain innovation. As the crypto environment is likewise growing, the requirements of people within this ecosystem propels the idea of crypto based loan and lending platforms. One such credit facility is ETHLend which will be the primary fascination of this article.

ETHLend is a dapp based on the Etherum blockchain which permits p2p loan upheld by Smart Contract. In this specific dapp, Smart Contract is the key component that makes it particular among others.

The target of ETHLend is in a state of harmony with the decentralization which is additionally at the center of blockchain innovation. It is a dapp on Etherum chain which permits p2p loan through Smart Contract. Here no outsider sets the standard for the moneylender and borrower, rather it is the borrower and the lender who set the terms & guidelines, so that either party can get into an agreement through a Smart Contract.

Getting Started with ETHLend

(1) Go to - https://ethlend.io

(2) Click on Get Started (right corner of the page)

(3) Fill all the relevant details like Email, Password, Country, Phone Number. Then click on Submit.

(4) Check your Email inbox where you can see an email from ETHLend saying to verify your registration. Clicking on that take you to the login page of ETHLend again.

(5) Fill the login details and then click on login.

(6) You can see now, there are three options appearing: Create Wallet, Import Wallet, Use an External Wallet. If you don't have an ETH wallet, you may click on Create Wallet and then keep your 12 phrase seed at a safe location and have a new ETH wallet . If you have an existing one, then you can import your wallet by putting your seed phrase. The third option is Metamask wallet and if you already have installed Metamask plugin in your browser, then you can directly use that by clicking on Use an External Wallet. But do remember that using an external wallet will not enable you to use bitcoin in the platform.

I have selected Use an External Wallet in my case, so it redirects me to connect to my Metamask wallet. After clicking on connect, it will automatically take me to my Dashboard.

(7) Now there are two options appearing: Borrow & Lend. You can choose either of them as per your requirement. I have chosen Borrow in my case.

(8) Clicking on Borrow shows me two options: Create & View All Offers. In Create I can create & customize my own loan request. In case of View All Offers, I will be redirected to the page where various existing loan offers are already put by the lenders. So it is giving the flexibility to both lenders & borrowers.

(7) If I click on View All Offers, I can see a list of available offers with wide options of interest rate(MPR), LTV, collateral, tenure, etc. I can check all of them and as per my suitability, I can choose the most competitive one.

(8) If I select a particular offer, then it will give me further details of that offer and according to that, I have to finally choose the borrow amount, collateral & duration and then can click on Take this Loan.

(9) The borrower is then required to Approve the Transfer and after approving the transfer the loan will be executed.

Main Components of ETHLend

The greatest quality of ETHLend as a lending platform is its decentralization. Crypto assets in no way are held by ETHLend and it works through Smart Contract.

The non-custodial Smart Contract is key in keeping the lending & borrowing business occurs in a decentralized manner. Information can be auditable as it is based on blockchain technology. The user always controls his wallet. The cross chain interoperability is another fascinating element of ETHLend.

Terms agreed between lender and borrower
The funds are released after a borrower agrees on the terms and conditions. Borrowers had to make regular interest payments. Moreover, the interest rate charged could be fixed or floating and can vary based on certain factors like market situations, quality of the collateral, the tenure of the loan and more.

Since cryptos are volatile in nature (at least for now), it may happen that value of collateral drops beyond a certain level. To protect borrowers in case of a sharp drop in the value of the collateral there is the margin call possibility: borrowers can call their loan back.

A borrower can essentially take an loan in ETHLend by backing his crypto resources as security. It is totally straightforward, no check, no paper documentation, no confirmation, and so forth and everything gets executed through a Smart Contract. The security must be discharged to the borrower when the advance is paid back completely, or to the moneylender if there should be an occurrence of guarantee call or when the advance wasn't completely paid back toward the finish of the loan time. On the off chance that the borrower defaults, the lender can most likely liquidate the collateral. A borrower is at the freedom to prematurely close the loan at any time.

LTV

LTV(Loan to Value) for all crypto assets is 50% whereas with respect to LEND tokens it is 55%. In any case on the off chance that the collateral worth declines beneath half, at that point it would trigger a notice call to include progressively additional crypto.

Fees

The fees in this platform is 20% of the interest on the lender side and 2% origination fee on the borrower side(in first installment only). In case of default, the platform fee is 5% of the collateral amount.

Pegged Loans

The facts confirm that cryptographic forms of money are exceedingly unstable. So arranging and taking a credit in crypto terms might be or may not be advantageous and it generally exposes to extra bit of risk. Taking into consideration of this reality, ETHLend enables users to get credits pegged to fiat money and that certainly makes the thing relatively easier for a lender's perspective.

Collateral and Loan choice

Right now, ETHLend acknowledges ETH, BTC, LEND and more than 180 liquid ERC20 tokens as security. One can avail loan in various options like: ETH, LEND, DAI, TUSD, ETH pegged to USD, EUR, GBP, INR, KRW, JPY and CNY.

LEND Token

LEND token is an ERC20 token and it is the native token of ETHLend stage. It is utilized as an utility token in the platform and users can borrow and lend using LEND token. As it is the native token, it offers extra privileges to the users in borrowing & lending.

• Zero Fee Lending. When using LEND as loan currency there will be no platform fees.
• 50% Discount on Fees. Using LEND tokens as collateral will reduce the platform fees by half.
• LTV Boost to 55%. LEND token allows users to boost the LTV up to 55% when using it as collateral.
• Featured Loans. You can use your LEND tokens to feature your loan displaying it in a very prominent way allowing to highlight your loan so it get funded faster.
• Become a premium user. Use your LEND tokens to become a premium user and you will be allowed to fund loans one hour before the normal users.
• Microstaking. The microstaking model allows any user in the platform to interact with the LEND token economy and get rewarded with their microstaking fees in LEND tokens over the time the users are active in the platform. You can check here for further details about the Microstaking model.

Pros of ETHLend platform:-

• Holding crypto assets have long term benefits as it is an emerging asset and long terms price appreciation will fetch more gains for hodlers. Apart from that, it keeps you safe from inherent inflation of paper currency. So at a time of emergency, when a person runs out of money, one can leverage on the crypto assets to take a loan in ETHLend.

• It is the most decentralized lending platform.

• Its user interface is very friendly and has a very professional design.

• It has an wide option of collateral. As many as as 180 ERC-20 tokens are accepted as collateral.

• Both lenders and borrowers have the liberty to customize their offer.

• A borrower can easily choose a most competitive offer from the listing.

• It is boarder-less. Borrowers and Lenders can easily make a deal with out any regulatory compulsion across the globe.

• It is a secured form of loan(backed with crypto assets as collateral). Hence lenders can feel more secure in offering better rates.

• All the parameters like interest rate, LTV, tenure, collateral types can be easily set as per the choice of borrower and lender. Simply put, it offers extra flexibility so that lender & borrowers can get into an agreement by an ease.

Cons of ETHLend platform

• Even though the loan offers can be customizable, if we check the listing and find an average value of MPR then we can see that it is still above 2% and APR if compounded can very well go above 27% or more than that. I am of the opinion that, the idea of decentralization is not just to bring more transparency but also to make the business more competitive for both borrowers and lenders. If we compare this interest rate with the traditional banking, then it still stands on a higher side. In traditional system, it is believed that because of third party's role, cost does not get effective for a user, so in a decentralized system which does not include a third party should be more cost effective. Of course it is p2p and people will decide and customize their offer. But too much interest also make a lending platform less attractive. Further, if more competitive offer will float, then it will attract the non-crypto players to join this ecosystem and that will also help the adoption of cryptocurrency in real world.

• ETHLend has worked towards interoperability by allowing BTC. I am a strong proponent of leveraging on cross-chain compatibility more than what it is now. So the the team should also look to enhance more on cross-chain compatibility so that other blockchains can be made compatible with this lending platform, which can further enable other types of coins and that can seriously boost the business potential of this lending platform.

Comparison of ETHLend with other lending platform(SALT)

Summary

The decentralized lending platform ETHLend definitely benefits both short term and long term objective. While the lender gets a business opportunity, the borrower fulfills his immediate fund requirement by leveraging on crypto assets. The easy to use interface further makes users very comfortable. The flexible offers, wide range of listing of offers help a lot to the users to get a competitive offer that can suit the requirement as well as repayment capability. Keeping an LTV of 50% definitely reduces the risk of volatility and the options like pegged loans to fiat currencies can also suit to the type of borrower who don't like volatile asset. The ETHLend has all the potential to become a leader of global lending platform in coming days.

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References used:-

(1) https://github.com/ETHLend

(2) https://ethlend.io/

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ETHLend Resources