SmartCredit.io has 20'000 registered users!

SmartCredit.io
SmartCredit.io & ChainAware.ai
4 min readJan 30, 2023

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We are excited to announce that SmartCredit.io now has 20'000 registered users!

20'000 registered users!

SmartCredit.io offers:

  • Efficient use of collateral for borrowing
  • Positions Monitoring System
  • Fixed-term, fixed-interest-rate borrowing
  • Personal Fixed Income Funds
  • Fiat on-ramp and off-ramp
  • Borrower and lender Bonus Rewards, Staking rewards
  • SDK for the integrations into the wallets
  • Widgets for the user interface based integration

See more below:

Efficient use of collateral in fixed-term borrowing

Two key benefits of fixed-term borrowing in SmartCredit.io are:

  • Predictability — borrowers will know in advance their cost of capital.
  • Efficient use of collateral — users can manage their loan positions effectively and borrow more on the same collateral amount.

Money Market Funds are not able to offer efficient collateral use. Let’s look into the details:

  • Money Market Funds have their hard-coded liquidation ratios — if collateral value sinks below the liquidation ratios, the platform will liquidate the loan. These ratios are ca on 115%-120%, and this results in high revenues for the liquidators (hint — SmartCredit.io never earns on the liquidations. Borrower’s collateral are borrower funds)
  • But borrowers choose arbitrary collateral amounts because there are no tools to help borrowers to select which amount of collateral to use
  • And even worse, these tools would not make any sense because the Money Market Funds need to know the loan maturity.

SmartCredit.io handles this situation differently, which results in efficient collateral usage.

  • The platform calculates the collateral amount for the loan with a 5% liquidation probability. This calculation depends on the loan term and collateral volatility.
  • The Borrower can connect his address with his telegram account and receive notifications from the Positions Monitoring System.
  • Or Borrower could decide to pay back the loan.
  • If the liquidation probability increases (for example, collateral value declines or collateral volatility increases), then per every 5% increase user will receive a telegram notification per active loan.
  • For example, the user would receive a notification at 15%, 20%, 25%, and so on.
  • The Borrower could then increase the collateral or reduce the liquidation probability.

Money Market Funds do not have the technical ability to offer efficient collateral usage to their borrowers — they do not know the loan maturities and do not have Position Monitoring Systems. This forces the borrowers to use very high collateral ratios in the Money Market Funds, resulting in low collateral usage efficiency.

SmartCredit.io, on the other hand, knows the loan terms and actively uses Position Monitoring System. This results in high efficiency of collateral usage.

Position Monitoring System

Every user can connect his wallet with his telegram account and receive notifications:

  • Loan payment deadline getting closer
  • Loan needs to be paid
  • Liquidation probability of a loan has increased
  • Borrower or lender bonus rewards received
  • Staking rewards received

The loans are created on the liquidation’s probability of 5% (some advanced mathematics is there in the background) — this means the collateral amount for loans is not fixed, but it depends from the liquidation probability.

If borrower connects his account with the Position Monitoring System, then he will receive automated notifications on every further 5% liquidation probability increase (15%, 20%, …, 80%, etc). If borrower is not taking any action, then his loan might get liquidated. Or borrower might pay back the loan or increase the collateral amount.

Fixed-term and fixed-interest-rate borrowing

SmartCredit.io focus is on the following:

  • Fixed-term lending for borrowers
  • Fixed interest rates for borrowers
  • DeFi fixed-income funds for lenders

Most borrowing/lending platforms offer variable-rate, variable-term loans for borrowers. We are the opposite — we offer borrowers fixed interest rates and terms.

Why is this important? Because of the cost of capital. Borrowers want to know how much their cost of capital is. In the same way, lenders want to know how much they will earn. Both sides will have predictability.

Additionally, we offer DeFi fixed-income funds for lenders. Lenders define which kind of loans they want to invest in — they describe their investment rules. Every lender can choose if they prefer short-term lending strategies (with less interest) or long-term lending strategies (with more interest).

Analytics Data

But first, let’s start with SmartCredit.io analytics data. It’s available in:

Additional Information

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