Investing in promising blockchain startups is now possible without selling your own cryptoassets. The Bmf.foundation lending program is announcing a use case on how to acquire tokens while HODL'ing what you already have!
Why Borrow Instead of Purchase?
The Bmf.foundation lending program offers all participants to borrow fiat funds (USD, EURO, BOLIVARES), instead of cashing out current assets. This creates a win-win situation for both parties, but mainly for you, as it allows you to earn more and creates a safety bag for a bad case scenario.
3 Main Things to Know Before Taking a Loan:
- You need to have some cryptoasset for securing a loan (BTC, LTC, ETH, XMR). Please be informed that you’ll be able to borrow fiat money equivalent to 60% of your collateral market value. It means that depositing crypto worth $1000, you’ll get $600 loan at least (60% of $1000).
- You’ll able to get your loan in EUR, USD, GBP, RUB and BOLIVARS.
- To withdraw your money, please coordinate with your representative to what financial platform you’d like to receive it on.
No Crypto? No problem ...
|CLICK HERE TO LEARN HOW TO BUY & EXCHANGE WITH THE Bmf.foundation AND MAKE MONEY WITH YOUR ASSETS!|
5 Steps to Getting a Loan:
- Register an account with https://bmf.foundation
- Contact a representative for details and crypto collateral setup.
- Fill out the application provided and determine with your representative payback schedule and the financial platform you would like to pay back through.
- Deposit crypto collateral.
- Withdraw fiat funds from the platform.
6 Questions You May Have as a Borrower:
- When can I repay a loan?
For short-term loans for a period up to 30 days you’re to repay once at any time. For long-term loans, you’re to repay partly every month. - Can I make full early repayment of the loan?
Yes, you can prepay the loan at any time without any penalties or commission. Interest charges will be recalculated according to the term the loan had been used. - What will happen if I am not able to repay the loan or forget to do it?
A few days before the scheduled repayment date, you will receive a payment reminder via Email. If you can’t make the repayment, the system will automatically liquidate a part of the collateral (cryptoasset). - How safe is my cryptoassets which are stored with the https://Bmf.foundation?
All cryptoassets are stored on cold multi-signature wallets with distributed key storage. In other words... safe =) - What are the limitations on the terms and amount of the loan?
The minimum loan amount — $200 USD, the maximum loan amount is $5000 (for now while we are BETA-testing).
You can take a loan in a term starting from 30 days to 36 months. - What will happen if the cryptoasset market value falls during the loan use?
If the collateral market value falls significantly, the borrower can do one of the following:
- Increase the collateral amount.
- Repay a loan in advance.
- Do nothing, and the system will automatically liquidate the collateral if the value will continue going down.
What is LTV
Crypto performs perfectly as collateral. Unlike a traditional collateral scheme, there’s no need to verify the borrower’s credit background and have the collateral assessed by a third-party.
But it’s not all rosy when crypto starts to fluctuate like crazy. In case if the value of active loan collateral falls, investor remains unprotected. Fortunately, the problem has a simple solution called LTV ratio. It’s a common thing in asset-backed lending to secure your loan with higher-value collateral (overcollateralization). A ratio between the amount of your loan and the market value of your collateral is a Loan-to-Value ratio (LTV).
How to Calculate LTV
The LTV formula is:
LTV = (Size of Loan) / (Collateral Value)
To determine your LTV, you simply divide your loan amount by the value of the collateral asset. For instance, to get €100,000 depositing 55 BTC, you need to determine your crypto value first. At current rates, 1 BTC ≈ $3,500, it means that the market value of 55 BTC is about $192,500.
Now enter 100,000 on your calculator and divide it by 192,500. You’ll get 0,52 or 52%. This is your LTV ratio.
If you want to count the amount of fiat you can borrow against your crypto, you should reverse the formula:
(Size of Loan) = LTV * (Collateral Value)
For instance, you’ve got 57 BTC, 1 BTC ≈ $3,500, so all your crypto market value is $200,000. Maximum LTV available with the https://Bmf.foundation, is 60%. Therefore, if you multiply 200,000 by 0,6, this equals to 120,000. Hence, you are able to borrow up to $120,000 with this specific use-case.
How It Works with the Bmf.foundation
In traditional collateral-based lending, LTV is a measure of risk for the investor. The higher the LTV, the higher the risk for the lender (and therefore the higher the interest rate for the borrower). That’s not the way it works with the https://Bmf.foundation. Cryptocollateral ensures full repayment in time; it reduces the lender’s risks. If something goes wrong with the monthly repayment, a part of the borrowers’ collateral is sold in order to compensate losses.
So choosing LTV ratio as a borrower, you determine your own risk first of all. Creating a Loan Request (Borrowing Application), you can set up an LTV ratio in the range from 5% to 60%. Lower LTV means you have a safety bag. In case of a market fall, your crypto is not likely to be liquidated to secure a lender’s investment. Higher LTV means that you will have to act fast in case of an extraordinary market situation.
LTV and Margin Call
A few days before your monthly payment or in case of critical changes in your cryptocollateral value, you’ll get email notifications.
If you forget to make a payment according to your schedule, we’ll make it automatically if you have enough money on your Bmf.foundation wallet. Otherwise, we’ll be forced to sell a part of your collateral for payment purposes.
In case if your collateral market value falls, your LTV grows. Here you can repay the loan earlier or add extra collateral. If you do nothing and the LTV ratio of the loan reaches 80%, we’ll sell a part of your cryptocollateral to bring the situation back into balance.
If the opposite happened and your loan value grew up, you’re free to withdraw a part of crypto from an active overcollateralized loan.
We hope that you join in with us in helping Venezuelans and widespread the use of borderless cryptocurrencies by giving back and taking control of your own money.
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