Crypto Lending: Redefining Credit & Loans
Individuals and organizations alike, we often need to borrow money for diverse purposes — inception or expansion of a business, increasing asset value, trading, and so on. In this context, lending has always been pivotal to financial systems.
Fundamentally, it is the process by which assets move to those who have an immediate need for it, from those who don’t. Lending enhances the productive utility of these assets — while the borrower gains in buying (or investing) power, the lender earns a passive income. Thus, over time, several lending services have emerged. However, despite their advantages, traditional lending systems have several shortcomings.
Involving multiple intermediaries, these systems often levy high overhead charges from the end-user. Moreover, they foster inefficiencies like high processing times, unequal access, exclusionary onboarding protocols, and so on.
Over the past decade, crypto lending has emerged as a promising solution to these problems. Sparked by Bitcoin’s release in 2008, innovations in decentralized finance (DeFi) present unprecedented possibilities for lending.
The Promise of Crypto Lending
Leveraging blockchain technology, decentralized financial (DeFi) systems enable distributed, transparent, trustless, permissionless, and censorship-resistant financial services, without involving intermediaries or a central governing entity. As a part of this ecosystem, crypto lending has several advantages over traditional, centralized lending protocols.
Replacing gatekeepers with computerized algorithms, crypto lending fosters microfinancing and ensures lending services for the hitherto-excluded global unbanked population. Moreover, it brings greater user-autonomy to the lending sector, thus democratizing it for both lenders and borrowers.
Built on a distributed network of computers, most crypto lending protocols are globally accessible and have minimal downtime. Distributed storage of the user’s lending-borrowing assets and data also ensures greater security, as well as privacy. Furthermore, by shortening the gap between lenders and borrowers, crypto lending leads to a significant reduction in end-user costs.
Hybrid Bank — Innovating Solutions in Crypto Lending
Hybrid Bank offers its diverse lending services contoured according to the needs of exchanges, mining companies, and individual users.
Exchanges are facing the escalating need of maintaining the prices of digital assets as per international market rates so as to decrease arbitrage value. Hybrid Bank’s instant lending services can be leveraged to maintain the price as well as aid Margin Lending activities that will enable exchanges to gain a higher return on capital.
For mining companies, Hybrid Bank’s services serve as the mitigating factor for the undesirable HODLing of crypto assets. The Global Cryptocurrency Benchmarking study published by the University of Cambridge (Hileman and Rauchs) noted that bitcoin miners alone earned over $2 billion by 2017. Hybrid Bank offers flexible loans to mining companies without the necessity to liquidate their assets.
Considering the diverse borrowing needs of individual users, the Hybrid Bank Ecosystem accepts several types of collateral products, with competitive interest percentages. Hybrid Bank further allows individuals to select from a range of recovery/lock-in periods. Lastly, users qualifying for Hybrid Bank’s service are offered low-interest lending options with competitive Loan-To-Value (LTV) for the collateralized assets.
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