An Analysis of P2P Cryptocurrency Loan Platforms
Gelios is designed as a platform which can enable loans via cryptocurrency by bringing lenders and borrowers together. In essence, Gelios provides something called P2P lending.
In order to provide better service to all participants on its platform, the Gelios team has done a thorough analysis of the P2P Cryptocurrency loan market. In doing so, they have found that there are three kinds of P2P cryptocurrency loan platforms:
- Classic P2P platforms that use cryptocurrency
- Tokenized microfinance organizations
- ICO P2P platforms
An Analysis of Existing and Failed P2P Cryptocurrency Loan Platforms
Nebeus, a new cryptocurrency banking startup, sells itself with the catchy slogan “Become the Banker with Nebeus.” Its team aims to do a number of interesting things: To issue a bank card that can make both fiat and cryptocurrency payments, to create a streamlined platform for the exchange of cryptocurrencies, and to obtain an official banking license.
On the cryptoloan front, Nebeus completes user authentication using a united KYC procedure. Applicants who have completed this procedure are issued a loan manually by an individual. Nebeus is selling a security token during its ICO, and aims to raise a massive 40 million dollars.
BTCJam was a service that ended operations earlier this year, following pressure from regulators and due to issues regarding the volatility of cryptocurrencies. Before facing those challenges, however, they managed to raise around 10 million dollars in funding via venture investment.
While the company has closed down, it did manage to prove certain aspects of the cryptocurrency loan concept. Loans were made and paid back in Bitcoin and the process did actually work largely as planned.
BitBond is another company that is proving the concept by providing loan services in Bitcoin. They have been able to secure a legal status within the European Union, having received a banking license from a German regulatory institution.
The loans offered by Bitbond are at the moment only in BTC, and are focussed on the needs of small businesses. The company has the ability to evaluate and accept or decline loan applications automatically, using information provided in the user’s profile. The platform establishes a rating for the user based on their actions.
BitLendingClub is another service that is no longer available, having closed in 2016. This mostly had to do with pressure from Bulgarian regulators. Before closing down, the platform hosted loan transactions that totalled 8 million dollars in cryptocurrency.
Humaniq is a new company that held its ICO in April, raising a total of 5 million dollars. Their aim is to provide microloans via cryptocurrency to the third world. Their idea is that they can collect data for scoring clients with a mobile application.
Micromoney is another company that aims to provide microloans to improve life in under-developed countries. Recently, the company completed its ICO, reaching its soft-cap of 10 million dollars. They have already begun to issue microloans in Southeast Asia as a decentralized credit bureau.
Salt Lending is an interesting platform that asks users to place collateral in order to receive a loan. This is an alternative to scoring borrowers in terms of credit. The Salt platform in essence operate likes a pawn shop, taking a certain amount of a digital asset, and returning it when the loan itself is returned.
Conclusions from the Market Analysis
Overall, it is obvious to the Gelios team that it is impossible to make a fully decentralized P2P cryptocurrency loaning platform. This has to do with four key issues:
- A large number of exceptions in credit products
- The necessity for credit scores
- The need for quality KYC
- Clients trying to work-around the scoring or KYC systems by making multiple accounts.
The Gelios Solution
Gelios is building a cryptocurrency loan system that operates as a “clean” platform. This mean that it does NOT do scoring, KYC, or other evaluation of the clients. These roles are taken up by participants on the platform. Platform participants include creditors, risk-analysts, collectors, webmasters, and KYC service providers.
Gelos’ “clean” platform means that the participants that provide the best results will see the most success, and that successful strategies will eventually be taken up by all participants. Among P2P cryptoloan platforms, it seems that Gelios is the most likely to lead to true, successful innovation.
Gelios provides a “white-label” solution which makes it easy for partner organizations to link up their business and website with the platform. Gelios does not do the lending itself — it provides a platform for lenders to get matched with borrowers. The same goes for risk-analysts, collectors, and webmasters. In this way, Gelios is most certainly set to be the first truly successful P2P cryptocurrency loan platform
Share your thoughts! The Gelios team welcomes the input of the community, and would be happy to hear your feedback! You can contact the team at email@example.com
For general information about the Gelios platform and ICO, visit https://gelios.io