Cryptocurrency Lending and Fintech
While the majority of existing Fintech solutions cater to the traditional banking sector, innovations in cryptocurrency have been leading the space. Since 2008, blockchain-based financial solutions have been gaining increasing popularity and attention. Presently, however, the inception of Decentralized Finance (DeFi) the fintech industry has fresh insights and possibilities on offer.
In the past, traditional Fintech innovators have attempted online, peer-to-peer (P2P) lending solutions, although the promise failed to materialize. Instead, online P2P lending platforms became easy prey to scams, frauds, insolvency, and unyielding regulations.
Mitigating these issues, blockchain-based DeFi protocols enable open, distributed, and truly P2P lending systems. Above all, blockchain technology eliminates intermediaries from the lending procedure, while also ensuring transparency and immutability. In doing so, cryptocurrency lending resolves several pain-points of the traditional lending sector.
The Scope of Crypto Lending
Decentralized cryptocurrency lending builds an efficient, uniform and fair platform without third-parties governing the decision-making process. This recognizes the 1.7 billion globally unbanked population and aids them in gaining control over their own financial undertakings.
Furthermore, it allows small and medium enterprises (SMEs) to overcome the roadblocks associated with limited financing, inefficient procedures, and unfair credit scoring systems. Most essentially, with decentralized cryptocurrency lending, the rate of innovation and creating solutions reaches an unprecedented high, provided by the composable and combinatorial properties of DeFi protocols.
Smart Contracts
In simple terms, smart contracts are codeblocks (computerized algorithms) that automatically trigger certain actions, based on pre-defined conditions. Similar to the underlying blockchain framework, smart contracts are immutable.
Smarts contract have substantial implications and use-cases in cryptocurrency lending, and in fact, actualize the elimination of intermediaries. Thus, they enable decentralized lending platforms to automate the terms of lending, borrowing, interest determination, and so on. Smart contracts also facilitate dynamic rates, based on the changing market value of collaterals. Furthermore, they impart greater autonomy and control to the end-user.
Identity Verification Service
While banks and finance institutions have traditionally relied on a centralized database for storing client information, it has proved to be predisposed to data leaks and breaches, leading to irreparable damage. In cryptocurrency lending, the blockchain’s shared ledger can store real-time data, while enabling verification and analysis. Thus, it makes any mutation and inconspicuous attempt easily detectable.
Leveraging the enhanced blockchain-enabled safety, crypto lending platforms implements accelerated verification and onboarding processes. Decentralized equivalents of credit scores and identity compliance procedures also allow users to seamlessly reuse their identity and credit information across platforms. That too, with enhanced privacy and control over data.
Hybrid Bank: Strengthening Cryptocurrency Lending
As a part of its diverse portfolio of lending services for lenders, mining companies, and exchanges, Hybrid Bank combines agility and value to enhance the gains obtained from underlying assets.
It offers lenders a range of lending options with selectable tenure and competitive interest rates on Loan-to-Value. Finally, Hybrid Bank acknowledges the value of a trustworthy financing ecosystem when it comes to lending, and therefore, has developed and perfected its decentralized credit information disclosure system for the blockchain. Through its solutions, Hybrid Bank is strengthening several aspects of cryptocurrency lending, making it ready for greater adoption.
