Introducing BlockLoan… Crypto Loans and Pooled Smart Contracts
What is BlockLoan?
Traditionally, if you want to get a loan, you would have to approach a financial institution and then go through the bureaucratic process of applying for it. This will most likely be a manual process, where you have to fill out lots of forms and provide lots of details. Then you will have to wait for your loan application to be reviewed and get either accepted or rejected. However, times have changed, and this manual process that most financial institutions use doesn’t meet customers’ needs.
Even the development of online or digital platforms that provide loans hasn’t yet been able to address the key problem that people who want to borrow money face. This is the possibility of borrowing money in real time in a simple, easy, cost-effective and transparent way. Also, if you have a bad or limited credit history, a lot of institutions won’t be willing to lend you money.
This is where BlockLoan comes in to fulfil the gaps in the market. It aims to make it possible for people to access credit anytime and anywhere in a transparent and efficient way. This is to be achieved globally through the use of the blockchain technology.
Currently BlockLoan is undertaking a private stage token offering to selected participants, you can view the BlockLoan Crypto Loans Whitepaper.
This is a decentralized ledger technology that uses a peer-to-peer network to give crypto loans to people from all over the world. This is founded on smart contracts using a new credit scoring system. The main goal of this process is to make it easier for consumers to access credit.
The Evolution of Banking Models
The 1980s — You had to visit the bank for all your transactions
The 1990s — ATMs were set up, making self-service possible
The 2000s — Online banking solutions were invented, making it possible to access banking services even after work hours.
The 2010s — The rise of peer-to-peer platforms offering competitive products
The 2020s — Banking platforms powered by APIs and blockchain technology
It’s expected that Peer to Peer (P2P) and digital loans will grow by more than 50% within the next five years. This is as a result of the advancement of digital lending technology, decentralized technology and the ability to develop countries to access more efficient lending systems.
The use of blockchain technology in the banking industry can help to speed up these processes, provide consumers with more options and greatly lower banking costs.
Traditional Lending Platforms Challenges
- Old fashioned credit rating methods
- Specific to certain channels and geographical areas
- Long bureaucratic application processes
- Borrowers cannot easily access their bio-data and personal information
- Takes a long time to handle the paperwork and compare options
- High transaction fees and other charges
- Only a limited number of people can access these services as a result of data information, such as bad credit history.
- Challenges in understanding legal implications and terms and conditions of the lending institution
The reason why these problems exist is that of the need to minimize risk and also the fact that banks didn’t have much competition before. This has resulted in a lot of inefficiencies in the credit industry.
Characteristics of Banking Based on the Blockchain
BlockLoan provides an extraordinary platform and concept when it comes to global lending, this includes:
- Traditional, non-traditional and Al credit scoring
- Worldwide crypto private lending
- Lending against equity portfolios while using cryptos
- End to end loan application and management
- Partnering with particular countries to reduce cases of loan defaults and for loan collections
- A Crypto debit card that can be used globally
- Pooled smart contracts that allows loan to be fulfilled completely when the funding goal is reached
Based on a Proven Existing Business — Lodex.co
BlockLoan has taken advantage of the experience and exposure that Lodex provides to access the Australian and global market. Lodex has more than 35,000 people who have signed up for their system. These people are already taking advantage of the various resources that Lodex provides, such as credit scoring, asset valuation reports, and social scoring. Also, the reverse auction feature makes it possible for banks and brokers to bid for loans or deposit requests put in by consumers.
BlockLoan will use the Lodex platform for end-to-end loan origination and management of crypto as well as fiat loans. This BlockLoan platform provides a network that connects borrowers and lenders through smart contracts. It also makes it possible for the flow of loans and ongoing payments to take place on an ongoing basis through the layers of services that it offers.
This model highlights a power shift that’s happening in the industry, where power is taken away from lenders and is equally distributed between lenders and borrowers, as brokers and lenders try to outbid each other to meet the needs of the borrower.
Also, the credit rating of individuals will be based on data collected from third parties, proprietary scoring and consumer’s social data. This way, a larger pool of people will be able to apply for loans. Consumers will even be able to access this information and export it to wherever they want. This will do away with the need for customers to send in multiple applications just to get a single loan.
Lodex Main Features
Some of the main features of Lodex include having several sources of information used to score and authenticate borrowers. Consumers can also auction off their loans or deposit needs on this platform and lenders and brokers will bid on the depositor’s business. The winner gets to fund the borrower or depositor.
Each lender has its own management system where they will manage the loans that they advance to borrowers. BlockLoan is going to revolutionize the credit industry through crypto loans, transactions that can be carried out through the use of tokens, smart contracts and how loans are managed right from the start when the application of the loan is made right to the end when the loan gets repaid.
- Well-experienced management team
- Using blockchain banking as a platform through the proven Lodex platform
- Revolutionize the lending industry through the use of smart contracts, decentralization and blockchain technology
- High liquidity through the use of tokens
- Provides services worldwide and can be easily scaled
- Flexibility when it comes to loan products
- Several sources of funding
- Being able to take advantage of interest rate arbitrage
The Multi-Million Dollar Lending Market
At the beginning of 2016, the lending market stood at $42.3 trillion. At this time, $1,790 billion was transacted through Peer to Peer (P2P) lending platforms. It’s projected that this figure will go up to $83,460 billion by 2025.
How BlockLoan Works?
BlockLoan is a decentralized crypto platform that offers lending solutions to borrowers. Anyone from anywhere in the world can take a crypto personal loan. The credit score of the individual will be assessed through a credit scoring system that will determine the credit-worthiness of the individual and their ability to make repayments.
Here are the steps that the consumer will have to go through:
- The borrower files an application, their identity is verified, and credit score is assessed
- Lender key criteria engine
- Collective smart contracts
- Loan disbursement and settlement
- Continuous loan management and repayments
How to Apply for a Crypto Loan
Create a user profile
Create your profile on the BlockLoan KYC portal. Additional information about you will be obtained from your social profiles and reporting agencies.
Apply for a specific loan amount
Once you are accepted into the system, apply for the specific amount that you need. Choose interest rates and terms of the loan. This will lead to a smart contract being generated in the system with the terms that you specified.
Get matched with a lender
There are two systems for matching borrowers with lenders. In the first system, a P2P model is used, where many lenders bid for one loan contract. The second model is the smart contracts pooled model where lenders are brought together beforehand. You only get to access your funds when they have been fully funded. It’s also not possible for the system to refuse to release the loan, as the system is completely managed by smart contracts and the lending pool digital wallet and smart contract.
Crypto-Equity Margin Lending Model
One of the best ways for BlockLoan to succeed in the industry is to take advantage of the equities margin lending industry. This can be a great way to bridge the gap between cryptocurrency and fiat currency.
In this model, investors will be able to take crypto loans by using their equity shares as leverage. This increases the chances of the investor making more profit through the added financing that they get. However, it also increases their risk for bigger losses, in case the market doesn’t go as they thought it
would. So far, this market has been controlled by fiat currency, but it now provides a great opportunity for investors to get into the cryptocurrency market this way.
Crypto-Equity Margin Lending Process
The equity holder applies through BlockLoan for credit
His equity shares get valued based on factors such as their liquidity and volatility among other factors
Crypto funds get transferred to the borrower
The purchased shares get transferred to the custodian
Custodian holds onto the shares until the loan is fully repaid
The BlockLoan model has potential to generate significant revenues through the size of the personal loans industry and the early-stage nature of crypto loans (at this stage there aren’t many participants in the space). Future revenues will mainly be through the fees earned when loans are fulfilled, loan management fees and transaction fees when transactions get debited. BlockLoan is also looking at the opportunity for secondary trading of loan portfolios using the transferable nature of tokens and smart contracts.
BlockLoan Token Offering
BlockLoan’s Initial Token Offering is expected to take place in late Q3 2018 and will have a total max token supply of 500 million BLL tokens.
During the Token Offering, 329 million BLL Tokens will be available for purchase starting at a full price of US$0.20 per BlockLoan token. The BlockLoan tokens can be purchased with Ethereum (ETH).
There will be 62.5 million BLL tokens available during the private pre-sale period at the discounted price of US$0.08 per token (60% discount to the Main Sale price). The private sale will be limited to selected participants.
A total of 150 million tokens will be available during the public pre-sale period discounted at 30% to 10% off the Main Sale full price.
To get whitelisted please complete the BlockLoan Whitelist form.
Full details of the token offering are available at https://block.loan/BlockLoan_Whitepaper.pdf
Tech Features of the BlockLoan Platform
The key features that the BlockLoan platform has for borrowers and lenders to use include:
Smart Contracts — This is an electronic agreement that has been pre-programmed through the blockchain ledger. It gets automatically executed when various events within the contract get performed. Steps that were manually performed before through paper applications get electronically encoded into the blockchain in smart contracts.
Pooled Smart Contracts — Different kinds of lenders can use this platform. This includes individual lenders, as well as institutions and expert traders or funds. These pooled resources make it possible for loans to be fulfilled. Borrowers only get the loan when they raise all the funds that they need, and then they can access the funds in crypto on the BlockLoan platform.
Matching Engine and Loan Bidding — Through the use of the matching engine, lenders will no longer have to review loan applicants as they can get automatically matched manually. The loan bidding process also allows for lenders to put in place rules and criteria that they would like their real-time applicants to meet.
Digital Wallet Partners — Users will need to have a digital wallet that’s connected to Blockchain so that they can be able to transfer and store cryptocurrencies. These wallets will be connected to your crypto debit cards, making it possible for you to access your funds wherever you are in the world.
Third-Party Data Providers — BlockLoan will have its own credit scoring system that integrates with social data, third-party providers and user history that will be used to assess the authenticity and credit-worthiness of users.
BlockLoan is the technology of the future when it comes to advancing personal loans and credit. This technology is founded on the blockchain technology, underpinned by smart contracts and is reinforced by a proven business model. This technology provides an alternative to traditional lending models that were inefficient and time-consuming. This system is geared more towards meeting the needs of borrowers and lenders in a modern and global marketplace.
To learn more about BlockLoan please visit:
BlockLoan website: https://block.loan
Download the whitepaper at: https://block.loan/BlockLoan_Whitepaper.pdf
Whitelist please complete the BlockLoan Whitelist form
BlockLoan Telegram: https://t.me/BlockLoan
Token strategy and advisory: Kapitalized.com
Marketing and Distribution: BlockToken.ai
See the team on Linkedin at: https://www.linkedin.com/company/blockloan/
Originally published at Kapitalized.