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Crypto Lending

IN this new economy crypto currency has become collateral. You can borrow against your bitcoin and get actual cash wired to your bank account.The are a few things to consider. First your loan to value when financing your crypto currency. How much do you want to borrow against your crypto?one very nice thing about using crypto currency is that your crypto can double and your loan be forgiven. In other words. free money and the lender is very happy. If you can not pay your loan this month, your lender will take your crypto as payment.Lenders who loan money against crypto currency does it fast, so you will have money right away, with out losing your crypto. Your crypto continues to earn and grow in size while you use the cold hard cash in your pocket. Wow!

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Crypto Lending

IN this new economy crypto currency has become collateral. You can borrow against your bitcoin and get actual cash wired to your bank account.The are a few things to consider. First your loan to value when financing your crypto currency. How much do you want to borrow against your crypto?one very nice thing about using crypto currency is that your crypto can double and your loan be forgiven. In other words. free money and the lender is very happy. If you can not pay your loan this month, your lender will take your crypto as payment.Lenders who loan money against crypto currency does it fast, so you will have money right away, with out losing your crypto. Your crypto continues to earn and grow in size while you use the cold hard cash in your pocket. Wow!

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What is the future of financing?

While banking has improved and evolved over time, many of today’s financing operations are proving inefficient and imbalanced. For example, digital tasks that look seamless to the user actually take days to process with countless amounts of human input. In addition, decisions about financing that affect billions of people are made by a privileged few. Many also don’t have access to bank accounts, disadvantaging them in the financial world. We need to ensure that we can move money around freely and our current financial structure does not allow this. This is why we need decentralized financing.

Crypto Lending

IN this new economy crypto currency has become collateral. You can borrow against your bitcoin and get actual cash wired to your bank account.The are a few things to consider. First your loan to value when financing your crypto currency. How much do you want to borrow against your crypto?one very nice thing about using crypto currency is that your crypto can double and your loan be forgiven. In other words. free money and the lender is very happy. If you can not pay your loan this month, your lender will take your crypto as payment.Lenders who loan money against crypto currency does it fast, so you will have money right away, with out losing your crypto. Your crypto continues to earn and grow in size while you use the cold hard cash in your pocket. Wow!

What is the future of financing?

While banking has improved and evolved over time, many of today’s financing operations are proving inefficient and imbalanced. For example, digital tasks that look seamless to the user actually take days to process with countless amounts of human input. In addition, decisions about financing that affect billions of people are made by a privileged few. Many also don’t have access to bank accounts, disadvantaging them in the financial world. We need to ensure that we can move money around freely and our current financial structure does not allow this. This is why we need decentralized financing.

What is Decentralized Finance?

In decentralized finance, there are no middle men like banks or credit card companies that are needed when transferring money between individuals. It takes away this notion of a single point of failure where if you put all your money in a bank and that bank goes under, you don’t get all of your money back. If you have lots of different devices that have your money, it is most likely that not all of these devices will fail at once. This will lead to a more global economy. When decentralized finance becomes more common, it won’t matter what part of the world you are from. All you will need is a smartphone and an internet connection.

What is decentralized crypto lending and how does it work?

Crypto lending as the name suggests is when you lend crypto currency or stable coins and gain interest income daily, weekly, monthly, or annually. While in traditional banking, you must go through tons of background checks to confirm repayment ability and hours worth of paperwork, crypto lending allows the borrower or lender to instantly participate in lending or borrowing. It is also entirely digital and has mechanisms in place to ensure repayment which limits the need for credit scores and background checks completely. These mechanisms are known as smart contracts which are algorithms that act as intermediaries, allowing businesses to interact with increased legal security and efficiency. Because of these safety mechanisms, a user can simply apply for the loan and choose the crypto they want to use as collateral for the loan to send to the lending platform. Borrowers can apply for a loan without having to confirm their identity. Loans are supported with stable coins like USDC, fiat currencies, or cryptocurrencies such as Ethereum or Bitcoin.

What are Stablecoins and Tether?

Stable coins are a type of crypto currency that are backed by an asset like gold or fiat currency which is currency that has value because of the government. It isn’t volatile which means that its price will not fluctuate from day to day making digital transactions easier and more efficient. A type of stable coin is a tether which is also a currency backed by a fiat currency like a dollar or euro. Stable coins can be used to trade in exchange for bitcoins or vice versa. You can exchange your volatile bitcoin for stable coins which are safer and when you are ready to purchase the more volatile bitcoin you can purchase it with the stable coin. To maintain trust that this coin has the value of dollars, companies tie assets to the coin as collateral. For example, one tether is worth one US dollar that the company actually holds. Companies also ensure the price of the stable coin won’t go up if too many people buy the coin by releasing more supply of the coin to balance out the demand.

What qualifications do the user have to meet to borrow on crypto currency?

There are no qualifications to borrow crypto currency. All you have to do is make an account with a crypto lending app and verify your identity and reliability as a borrower. With this, you will receive a trust score based on the degree to which the application can verify both financial history and identity. Next you put up crypto currency as collateral and pick the loan that has the best interest option for you. If you choose a higher interest option, you typically will not have to put up as much cryptocurrency as collateral. The only thing that is recommended for the best interest rate and term is to have a loan-to-value ratio of at most 50%. 

What are Stablecoins and Tether?

Stable coins are a type of crypto currency that are backed by an asset like gold or fiat currency which is currency that has value because of the government. It isn’t volatile which means that its price will not fluctuate from day to day making digital transactions easier and more efficient. A type of stable coin is a tether which is also a currency backed by a fiat currency like a dollar or euro. Stable coins can be used to trade in exchange for bitcoins or vice versa. You can exchange your volatile bitcoin for stable coins which are safer and when you are ready to purchase the more volatile bitcoin you can purchase it with the stable coin. To maintain trust that this coin has the value of dollars, companies tie assets to the coin as collateral. For example, one tether is worth one US dollar that the company actually holds. Companies also ensure the price of the stable coin won’t go up if too many people buy the coin by releasing more supply of the coin to balance out the demand.

What qualifications do the user have to meet to borrow on crypto currency?

There are no qualifications to borrow crypto currency. All you have to do is make an account with a crypto lending app and verify your identity and reliability as a borrower. With this, you will receive a trust score based on the degree to which the application can verify both financial history and identity. Next you put up crypto currency as collateral and pick the loan that has the best interest option for you. If you choose a higher interest option, you typically will not have to put up as much cryptocurrency as collateral. The only thing that is recommended for the best interest rate and term is to have a loan-to-value ratio of at most 50%. 

What crypto can users use as collateral?

You can use Bitcoin, Ethereum, Ripple, Litecoin, Lumen, Bitcoin cash, EOS, LINK, Tron, Polkadot, Cardano, DOGE, stablecoins, PAX Gold, NEXO and Binance coin. 

How do I repay the interest and principal?

You can either repay the amount with your crypto or wire the money to your loan processor to receive all of your crypto collateral back. If you want to pay with your crypto, you must inform the loan processor prior to the maturity date. You can also pay off the loan with stable coins. 

Can I make a full repayment before the due date?

You can make a full repayment before the due date; however, you will still have to pay the full interest payment on the last day you repay the money. 

What is my Loan to Value ratio (LTV)?

Your loan to value ratio is the amount of money you are borrowing to the value of collateral you are putting up for the loan. The higher the ltv is, the higher risk you are considered since the lender has less collateral to get his money back if you cannot pay back the loan. Most crypto lending platforms enforce a 50% LTV ratio, which means that you must borrow at least half of the amount of collateral you are putting up. 

What happens when my LTV is too high?

If your LTV is too high, your interest rates will be higher than if you had an LTV of 50% or less. If you start a loan with an LTV of at most 50% and the value of the crypto currency goes down leading to an LTV of more than 50%, the lender will liquidate your crypto assets to protect themselves from losing money. 

What happens if my loan repayment is overdue？

Similarly with the higher LTV, if you fail to repay the loan before the date, all of your crypto collateral will be liquidated and used to pay back the loan. This ensures the safety of all lenders.

Can I use the crypto I borrow to trade in Margin and Futures? Can I withdraw them?

Yes, you can as long as you meet the qualification for using the services and you can withdraw them as well.