CoinLoan Complete F.A.Q.
What is a CoinLoan Token (CLT) and what role does it play on the platform?
A CoinLoan Token (CLT) is an ERC-20 compatible token based on the Ethereum smart-contract. The main function of CLT is to pay the platform fees. This covers fees for borrowing and providing the loan. Also, there is the option to use CLT as the collateral when taking out a loan. If the borrower uses CLT as collateral there will be no platform fee, the borrower will only be charged the interest on the loan. To calculate the maximum loan amount given a CLT collateral, CoinLoan will use the market value of the token combined with a LTV (Loan-to-value ratio) of 80%. However, when borrowers use other crypto-assets as collateral, the LTV is 70%.
How much will the platform fee comprise?
A borrower can pay a platform fee of 1 CLT for borrowing a $10,000 loan for 1 month. For loans covering a longer time horizon, CoinLoan will use a formula to calculate platform fee. It must be noted that the longer the loan term, the lower the monthly fee.
The lender will pay a fee equal to 10% of the income received from the accrued interest. You can find more details in the next answer.
What is SCO? When, where and how it will be held?
In our case, SCO (Secondary Coin Offering) is a limited token sale after the official launch of the platform. SCO will be held only if the funds for further platform development are needed (e.g., for entering new markets). The sale will only be performed on our platform at a price equal to $10. If the market price of the token (CLT) is above $10 it will be sold at market price.
How can you predict the $10 token market value after launching the platform?
We are not predicting the market value of CLT. After the official launch of the platform during the SCO the tokens will be sold at a price not below $10 for 1 CLT. Demand for the token is generated in the following ways.
First, the lenders will be charged 10% of their income (i.e., accrued interests). Here’s an example: Let’s assume that the lender has provided a $10,000 loan at 15% and gained $1,500 as interest. These $1,500 will be charged a 10% platform fee. This is a charge of $150 (a low fee for the full safety of funds). But the lender will be able to pay 15 CLT instead of $150 expressed as 1 CLT >= $10. Therefore, it will be more profitable for the lenders to pay the platform fee in tokens. Note: The fee will be 10 times lower for Pre-ICO participants who have bought tokens at $1.
Second, as earlier stated, borrowers pay a platform fee when borrowing loans. Unlike lenders, they cannot choose to pay in fiat.
What will happen if the market value of the token exceeds $10? Are you going to put the cap on the market value?
No, we are not. After the token price on the market (crypto-exchanges) exceeds $10, we will also correct the rate inside the platform. The token price at SCO and the lender’s fee will be based on this rate.
What is the token price structure at the ICO?
The price will start from $2 at ICO. It will increase by 50% after each tier tokens are sold at that price.
The ICO will be stopped after reaching the hard cap of $56M or on December, 29, 2017 at 14:00 UTC. All unsold tokens will be transferred to SCO after launching the platform.
How will the tokens be distributed?
What will happen with the unsold tokens?
All unsold tokens will be sold at SCO in limited lots only after the official launch of the platform and at a price not below $10.
When tokens are redeemed for fees on the platform, how are they put back into circulation?
All tokens paid/redeemed as a platform fee will be burnt.
Do you have a soft cap? What will happen if you don’t raise the required amount of funds?
Our total soft cap is $3M. If we don’t raise this amount, we will return all funds to the contributors.
Are you sure you’ll be able to obtain the required license?
On November 21, 2017, CoinLoan was successfully granted a European license by the Register of Economic Activities (License No.FIA000071). This license allows legal operation of fiat, crypto and alternative means of payment.
Citizens of which countries can use the platform (lend and borrow loans) on a full scale when will be launched?
After launching the platform we plan to cover most countries.
In what currency can the loans be borrowed or lent?
The lender can provide loans in major fiat currencies only (USD, EUR, etc.).
The borrower can also borrow loans in fiat currencies only. Cryptocurrency is used as a collateral only.
How does CoinLoan ensure full repayment of funds and mitigate the 3rd party risk for the lender?
All loans provided on the platform are secured on the borrower’s crypto-collateral (e.g., Bitcoin, Ethereum or other cryptocurrencies). During the loan term, the crypto-collateral will be stored in the safe CoinLoan vault. If the borrower does not repay the loan, the system will automatically sell/liquidate the crypto-collateral and return the funds to the lender in full.
What interest rate will the platform provide?
The platform will not provide a pre-set interest rate. It will be fully market-dependent. The lender will set the interest rate in his/her loan application, and the borrower will state the desired interest rate for getting a loan. The system will automatically bring the matching applications together.
Will there be any intermediary milestones/news before launching the project?
Yes. After the ICO ends, we continue with the licensing the company. Further, we will regularly publish reports on both legal and technical progress made. The reports will be published at least once a month at a minimum. However, we expect to produce reports on a weekly basis. Transparency is very important to CoinLoan.
When and on which exchanges will be the CLT listed?
This information will be available after ICO. We will try to list our token on several largest crypto-exchanges as soon as possible.