Tutorial #1: Digital Asset Lending Platform Bloqboard | Overview
An intro to peer-to-peer loans, liquidity pool loans and getting started with digital asset loans
At Bloqboard, we’re working on a series of tutorials to walk users through the process of lending and borrowing tokens directly from their wallets via our portal. This first guide will provide a general overview of how Bloqboard works.
The following four tutorials will walk users through the borrower and lender customer journey for both peer-to-peer and liquidity pool loans, and they include:
- Tutorial #2: how to borrow and repay a peer-to-peer loan
- Tutorial #3: how to borrow and repay a liquidity pool loan
- Tutorial #4: how to lend peer-to-peer
- Tutorial #5: how to lend with a liquidity pool
We’ll update these tutorials periodically, as we make improvements to the platform. Got a question that isn’t covered here? Reach out to us in our Telegram group.
What is Bloqboard?
Bloqboard is a digital asset lending platform. Bloqboard provides users the ability to borrow and lend tokens, and have their transactions settled on the Ethereum blockchain. Our solutions are designed for crypto funds, asset managers, users of digital wallets, trading platforms, exchanges, customers of custodians and anyone who would like to borrow and lend tokens. Users can borrow and lend directly from their wallets, without ever needing to trust Bloqboard with the custody of their tokens, thanks to the Ethereum blockchain, as well as Dharma and Compound, two leading open lending protocols.
Why would I want to use Bloqboard?
Imagine you’re a token holder — whether a retail investor or institutional firm like a crypto hedge fund — and you’re sitting on ETH or other major ERC-20 tokens, because you believe in the long-term upside. Bloqboard provides you with an opportunity to retain those tokens and earn interest on them for the given period that they are loaned out.
Value proposition to lenders: lenders would use Bloqboard and liquidity pool loans to “park” their tokens and earn prevailing market rate on their holdings until they see more attractive opportunity with lending peer-to-peer. It also works vice versa — proceeds from repaid peer-to-peer loans can be “parked” in liquidity pool loans. Bloqboard aims to engineer lending use cases with decentralized finance protocols and our goal is to provide superior user experience and to create liquidity network for non-custodial lending.
For borrowers, Bloqboard provides the ability to margin fund trades and take advantage of short selling opportunities. Borrowers that are long a particular digital asset, say ETH, could use that as collateral to borrow another token that they want to short or exchange it for more ETH to leverage their ETH position. After completing the short, the borrower would return the borrowed tokens and receive their collateral, in this case ETH. Thus, for both borrowers and lenders, Bloqboard provides an opportunity to profit from their digital assets.
We’ve made our API available to power your trading platforms and bots with lending and borrowing capabilities. Our API can be used to integrate with exchanges, trading platforms and other financial applications. You can find the API docs here.
How does it work?
Borrowers can request a loan either peer-to-peer or with a liquidity pool.
By borrowing and lending peer-to-peer, both counterparties commit to a predefined interest rate and loan duration. By borrowing and lending with a liquidity pool, both counterparties are committing to a variable interest rate and a loan without a fixed end date. At the moment, Bloqboard supports BAT, DAI, ETH, REP, SNT and ZRX.
Borrowing and Lending Peer-to-Peer
By borrowing peer-to-peer, a user specifies the following parameters:
- Desired interest rate
- Principal token (token you want to borrow)
- Collateral to back the loan
All loans are backed by ERC-20 tokens, so that in the event that a borrower is unable to repay, the lender has the ability to seize the collateral locked in the smart contract. In the future, underwriters will likely emerge to originate debt orders from borrowers, negotiate terms for the debt, assess the likelihood that a borrower defaults, ensure repayments and collect collateral in the case of delinquencies (if collateral is off chain).
Once a borrower has filled out a loan request, it then gets submitted to the Bloqboard listing board. From there, lenders can select loans that they find attractive.
In the future, Bloqboard will allow lenders to post offers to lend, allowing borrowers to instantly get a term loan.
Borrowing and Lending with a Liquidity Pool
Borrowing and lending with a liquidity pool is done instantaneously, without the need to specify the duration or interest rate. The borrower here can repay the loan whenever they choose and the interest rate is determined algorithmically, based on supply and demand.
It’s worth taking a moment to understand how both loan types compare. The table below provides a full comparison of the two types of loans that Bloqboard offers.
Connecting to Bloqboard
Connecting to the Bloqboard dApp first requires MetaMask sign-in. If you don’t already have MetaMask, you can download it as a browser extension for Chrome, Brave, Firefox, and Opera. You can also easily connect your Ledger or Trezor wallet to MetaMask and use your hardware wallet to sign-in to Bloqboard. Alternatively, mobile users can access the dApp on iOS and Android via Coinbase Wallet and imToken. At the moment, only term loans are available on mobile devices.
A couple things worth pointing out:
First, Ether (ETH), whether you’re using it to fill or collateralize a loan, must first be wrapped. “Wrapping” your ETH is a necessary first step in order to make it compatible with the ERC-20 token standard.
Second, if a transaction is taking a long time to confirm in your MetaMask wallet, you can try increasing the gas price slightly. We’ll go into step-by-step detail in our forthcoming tutorials and tackle common problems encountered when using the dApp.
Call for partners
We’re looking to connect with a range of prospective partners in the months ahead.
If you fit any of the below groups, please reach out to us at firstname.lastname@example.org to learn how Bloqboard, a digital asset lending platform, and its API can provide borrowing and lending solutions to your businesses!
- Crypto hedge funds
- Asset managers
- OTC trading desks
- Family offices
- High-net-worth individuals
- Financial application developers (trading platforms, asset management platforms, personal finance management platforms, trading bots, etc.)