The Lending Ecosystem of the Future is Here

Viva Network
2 min readOct 9, 2018

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Lending to another person with the agreement that it will be paid back with interest has been around for ages. Furthermore, it’s still considered one of the safest investments since real-world commodities like real estate often back these debts. Over the years, this one to one transaction has become more complicated by adding middle persons like banks and other intermediaries to administer loan payments. Intermediaries often add to cost and complexity.

Blockchain technology has created several ways to improve the lending system through peer-to-peer mortgage lending and tokenized debt securities. The next step will be for real estate companies is to invest in blockchain technology which will drive efficiency and pass on even more profits to investors.

The New Lending Ecosystem Involves:

1. Peer-to-Peer Mortgages

Instead of investing in traditional real estate investment trusts (REITs) or bond-based mutual funds, peer-to-peer mortgage lending will give you much higher returns (8–10%). If you don’t want to worry about finding the right borrowers as you are allowed to invest small portions of several different mortgages, peer-to-peer mortgage lending is your answer. By investing in a lot of different mortgages on a peer-to-peer basis, one mortgage default or prepayment won’t affect your returns very much. Also, you can keep the extra commissions that would typically go to the intermediary bank by investing directly.

2. Tokenized Debt Securities

Similar to peer-to-peer mortgages, tokenized debt securities are the new way of investing in bonds. Before the tokenization of these securities, it was challenging for an ordinary investor to invest in sizeable high yield corporate bonds. Now investors are using tokenized debt securities to access these bonds. They can buy a small fraction of several corporate bonds directly, pocketing higher returns that would typically go towards the administrative fees of banks.

3. On the Horizon: Transparency for the Housing Market

Typical mortgages have 10,000 loans and not much transparency. No one knows what percentage they own. With Viva, you can own fractions of individual mortgages instead of fractions of 1000’s of mortgages. Therefore you can see what you’re invested in.

Investors can expect even higher returns to those investing in real estate based products such as tokenized debt securities and peer-to-peer mortgage lending.

To Learn More About The Viva Network take a look at the video here.

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