5 Use Cases of Cryptocurrency Lending

Interest

While the average FICO score is 705, the best interest rates are only enjoyed by 1.2% of the US population. FICO scores are unfair, in the sense that they don’t take into account social and personal factors that affect a person’s financial standing.

Arbitrage

Arbitrage is somewhat like a conflict zone between exchanges and traders. On the one hand, users can borrow at a given rate and lend these assets on another platform for a higher interest. Exchanges, on the other hand, intend to minimize arbitrages, primarily by maintaining a steady supply (liquidity) of assets by borrowing from lending platforms.

Identity

For banks alone, AML compliance costs amounted to $1.5 billion annually. DeFi is revolutionizing the finance sector by providing blockchain-based member identifications solutions that are immutable, secured, transparent, and privacy-prioritized. Furthermore, interconnected blockchain networks enable seamless sharing and ID access across platforms, corroborating the member’s credit history, identification, income, and employment verification.

Flash Loans

Flash loans are non-collateralized, real-time loans, designed especially for developers. Through this method, borrowers can get instant loans and use them for executing blockchain operations. The only condition, however, is that the liquidity is to be returned to the pool within one block time. Failing to do so will nullify all the transactions that were executed with the loaned amount.

Hybrid Bank aims to offer Micro-Lending to crypto users.

Fiat Loans

Given that they keep earning secured, passive income from their crypto-assets, most owners, especially HODLers don’t wish to sell or liquidate their cryptocurrencies. To meet rising demands in this regard, crypto lending platforms offer crypto-collateralized fiat loans at competitive interest rates.

Hybrid Bank: Transforming Crypto Lending Use-Cases

Hybrid Bank Transforming Crypto Lending

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HYBRID BANK

Hybrid Bank is building a platform with Tools and Techniques to value Credit Worthiness of Companies dealing in Digital Assets.