ETHLend is a DAPP, or Decentralized Lending platform, that runs on the Ethereum Network. The goal of ETHLend is to offer users a secure platform for operating their Smart Contracts.
The lending process is typically very paperwork-heavy and comes with a lot of fees and time commitment when handled by traditional banks. ETHLend is striving to democratize that conventional process and remove the control that banks and financial institutions hold, instead placing the power directly into the hands of the two parties who are involved in an agreement.
ETHLend is different from other loan applications and blockchain technology companies is that run on the blockchain because it allows the lender and the borrower in a given agreement to decide on the essential details of their contract with absolutely no need for a middleman or third-party. That means two people from anywhere in the world can choose to build a Smart Contract based on their terms.
For those new to the world of Smart Contracts, the many benefits of decentralized applications may not be readily apparent. However, when one begins to inspect the traditional lending process, it's easy to see the core problems that are associated with the centralized system that conventional banks have established for borrowing.
One of the key reasons why a person would consider switching from traditional lending to a decentralized system for loans would trust. With decentralization, there is no need to trust the counterparty of an agreement.
Collateral is placed to secure the contract, and that collateral is then locked away and controlled based on the various aspects laid out in the Smart Contract. Every transaction related to the contract is also displayed on the public blockchain, which ensures transparency and that no lying or scamming takes place. Collateral tokens are a unique feature to ETHLend.
This transparency is another critical reason why decentralized lending is taking off as the most innovative alternative to traditional lending practices. ETHLend runs on the Ethereum network, which uses a transparent and public ledger where every transaction can be inspected by any party at any time.
Each transaction that happens is recorded to this ledger and can be verified by any party. Ethereum in itself also has established a transparent account system, and as the basis for ETHLend, this negates the need to trust another party when entering into a contract blindly.
ETHLend will automatically track every transaction of digital assets related to the contract and verify that each party is holding up to their side of the bargain. The use of the Ethereum network as the basis for ETHLend also establishes the third primary reason why a person would choose to use it: accessibility.
ETHLend enables borrowers and lenders to readily and quickly set up their loan transactions regardless of their geographical location. These transactions will take place inside the Ethreum network, which means any collateral will be sent from an Ethereum address to an Ethereum address.
This design makes for unrestricted access to a global platform that any two parties can use. With it being unconstrained yet so secure, borrowers and lenders will gain access to a substantially larger pool of loan liquidity than ever before.
Every Smart Contract on the ETHLend platform begins in the same way. It starts when the platform requires any given borrower to post either Ethereum Name Service (ENS) domains or ERC-20 compatible tokens as their collateral.
This collateral will protect the lender in case the buyer ends up defaulting on their loan. As of right now, borrowers are only able to create a loan request on ETHLend, which means lenders can't currently come and offer up a loan for borrowers to consider.
This is similar to a borrower going through a traditional means of applying for a loan. With ETHLend, they must specify a loan request by including some key data points, like how long they’ll need the loan for, the interest premium, and the tokens they’ll put down for collateral.
A lender will then be able to look at the various loan requests out there and, if they agree to the terms, a Smart Contract will be created to manage the loan agreement. When a loan is designed, only two scenarios can occur at that point.
First, the borrower can repay the loan as promised. That means the lender will get their principal investment back (loan amount) plus the interest amount the borrower agreed to pay.
Second, the borrower may fail to repay their loan. In this case, the lender will receive the collateral that the borrower posted.
As with any lending transaction, the lender is taking on the potential risk that the buyer won’t pay their loan back in full. It will be up to the lender’s discretion to decide whether the collateral a borrower has put up is enough to justify the risk and potential return (interest).
In reality, ETHLend very much resembles the traditional world of lending, except that it opens the doors for just about everyone to participate with a minimal barrier to entry. And, by removing the third-party that’s traditionally required to facilitate a loan, ETHLend can encourage more borrowers and lenders to participate without high costs or transaction fees.
ETHLend is driven by the LEND tokens, which went on sale in 2017. The sale ended on November 30th and raised just $40,000 shy of its original goal. This is still impressive considering they had set a massive $17,900,000 goal and managed to raise $17,860,000 in initial funds.
The maximum number of LEND tokens that will ever be in circulation is 1,299,999,942. At last count, just over 1,032,154,231 LEND tokens were in circulation.
The most significant price drop that LEND has seen so far lasted for a 10-day period. It occurred on January 7th, 2018 and the price of a LEND token went from about 40 centers to around just 10 cents. This price drop was attributed to some rumors that the government of South Korea would be banning Bitcoin and other cryptocurrency exchanges.
These rumors proved to be false, and the LEND token recovered soon after just as other tokens and coins began to recover from mild drops as well. The price of a LEND token has now somewhat stabilized, and the market continues to move sideways in the near 15 to 20 cent range.
With an established team and prevalent vision, ETHLend is considered to be a strong player in the competitive crypto marketplace. It has experienced widespread adoption since its launch and continues to receive praise from countless publications both inside and outside of the crypto community.
It will be interesting to see what 2019 and beyond hold for the ETHLend community as blockchain becomes more widely known and the benefits of services like the ETHLend platform continued to be recognized by the general public, and businesses.
Users can sign up for a Coinbase account and use a debit card to purchase BTC or ETH. BTC or ETH can be used to ETHLend on an exchange. Users can create a Binance account to purchase ETHLend with their wallet address.
Coins.Live is a prime resource for ETHLend news, resources on how to buy ETHLend, and market cap. Coins.Live offer in-depth insights, ETHLend breaking news, information on the ETHLend team, and development updates.
|Genesis Date||November 30, 2017 (3 months)|
No Recent News