Don’t sell your digital assets, instead borrow against them!
Lendroid is a digital asset lending and platform based on Ethereum. Imagine ‘shapeshift’ where you deposit a token to receive another token, but with an option of getting back, the first token deposited, albeit for a ‘short’ term.
Website: https://lendroid.com
Twitter: https://twitter.com/lendroidproject
Slack: http://slack.lendroid.com
Not so long ago (22nd March 2010), a Bitcoiner bought a pizza for 10,000 BTC. Today that pizza is worth over 10,000,000 million USD (as of 27th march 2017).
This is an important lesson for everyone in the crypto-space. We are dealing with highly volatile and high potential assets. Just because the assets you hold are highly liquid and is easy to spend doesn’t mean you should. You should be more careful about them.
Digital assets (tokens) just on top of Ethereum are now worth over 260 Million USDs
So, what is the best alternative?
Treat your crypto holdings as assets, not as a currency. Like your house or gold. You can collateralize your crypto asset to avails loans that you can deploy for your initiatives.
What are digital asset loans?
You pawn a digital asset you own and avail a loan against it. A digital asset like ETH, REP, BTC etc. You receive loans in the token(usually another ETH based token) according to your preference.
Lendroid is platform that is making this happen.
Why collateralized digital asset loans?
Digital assets make great collateral:
Digital assets are freely traded, already priced by the markets, usually deflationary and make for great collateral. Thus, appraising the collateral is not hard.
Trustless:
Smart contracts eliminate the need for a trusted third party to secure the collateral there by cuts costs paid to the middleman. This is a great advantage for both the parties.
Eliminates arrangers:
Traditional arrangers charge 1–5% of the funds being arranged as fees. Smart contracts eliminates the arranger, thus cutting the charge down to 0%
Transparent:
Lenders and borrowers both clearly understand the payoff and the interest goes directly from the borrowers to the lenders.
Digital assets may appreciate*:
Crypto tokens are assets and the borrowers are better off borrowing against their digital asset rather them selling them, as they get to enjoy the appreciation in value of the digital asset, while unlocking capital for their initiatives.
Not all digital assets are liquid:
Even though a user has the options to sell their asset to raise capital, not all digital assets equally liquid and one might crash the market if they try to sell to raise funds.
On-chain loans scale well:
On-chain contracts can handle tiny loans that are worth a few USDs and loans that are worth millions of USDs equally well.
We are looking forward to hearing for you. Let’s build Lendroid together! Make sure you join the conversation in our community slack: http://slack.lendroid.com
