Proud to announce that development of my next service offering to the HIVE community has begun it's development phase. While currently the site isn't far enough along in it's development cycle to allow for online alpha testing the TLD and web server has been set up and another member of the HIVE besides myself has been brought on board the development team in order to help get things rolling faster.
This service is being developed in tandem with my Hive-Roller.com site which is currently the main focus of my own development work, however the addition of an additional development team member on the Hive.Loans project should keep that site's development moving along even when I'm not focused on it.
Without further adieu I present to you what the Hive.Loans project will do and a rough overview of how it will operate it's day to day business. While still a few months minimum until it's ready to start alpha testing the business model and modus operandi have been established and are currently being put into code.
Business Model, Profit Model & Service Overview
The Hive.Loans platform will be a fully automated (HIVE) blockchain based lending platform specializing in providing HIVE capital loans with affordable interest rates (5% - 20%) over medium to long term durations, with the loaned capital being crowd sourced from willing creditors in the community wishing to see a return on their liquid HIVE. If a given potential lender has sufficient collateral in the form of Hive Power(HP) in their account (say a minimum of 150% - 200% above requested loan amount) then they will be given the option to apply for a loan, which will be granted after they have relinquished the private keys to said account containing the collateral. All of the account keys of the user lending the HIVE capital will be changed by the Hive.Loans service prior to the capital being released to the borrower, however they will be provided with both the new posting and active keys, in order to still be able to utilize their account while they are paying off the loan, which will be paid off in weekly payments via HIVE tokens that is automatically triggered into a powered down state when the loan is granted after the borrower has provided their keys and they've been changed over.
In order to qualify for a loan from this service the borrower will have had to set their recovery account to the Hive.Loans account 30 days prior. A guide on how to do this as well as tools provided on the site will make this process painless and the site will also provide account recovery services free of charge.
Those wishing to provide HIVE capital to be lent out will have the ability to specify what the minimum and maximum interests rates they are willing to provide capital at, as well as minimum and maximum duration they'd like to have their capital out on lend before being paid back. The way the Hive.Loans service creates income for itself is to charge a small commission fee in a form of some percentage of interest profits earned (5% - 10%) by the lender. The amount of commission fee percentage paid by the lender for the Hive.Loans service facilitating the lending and ensuring repayments are collected will likely be variable, with those providing large amounts of HIVE capital to be lent out to borrowers gradually paying less in service fees as a reward for their loyalty and continued supplying of HIVE to be loaned out.
Community Lending Pool & Multi-Lender Contracts
While ideally the Hive.Loans service would be able to pair up single lenders and borrowers to fulfill eachothers financial demands if the service was to allow pooling of lenders funds it would in theory be able to provide loans of greater amounts and duration than those of straight peer to peer lending. Lenders will have the option to have their capital added to the community lending pool if they wish, which should increase the rate at which lenders are able to find borrowers to collect interest on repayments from. However this presents challenges such as deciding which lenders get priority to provide capital for loans over others. The obvious solution for this is that the lenders with the lowest minimum interest percentage rates will be queued before those with higher minimum expected interest return rates.
In the event where multiple lenders are used to fill a loan request, the profit made via the interest received when the loan is repaid will be distributed according to what percentage each lender provided to fill the loan, with the sites commission fee being subtracted from the weekly repayment before it goes on to be distributed to lenders according to percentage of capitol provided.
Borrower Account Handling & Defaulted Loan Policy
Due to the nature of an account as collateral lending service the Hive.Loans site will be handling users account credentials and other highly sensitive information quite regularly. Due to this the site will shy away from accepting lenders private keys in raw text form and instead will enforce that all keys be sent via encrypted memo, with the borrower encrypting their full set of private keys with the Hive.Loans keys before sending. Before a borrower is eligible to apply for a loan they must have at least 30 days prior set their recovery account to Hive.Loans in order to ensure that recovery of funds can be done in a timely matter without resistance if for some reason the borrower finds a way to default on the loan by missing payments.
Procuring accounts that have defaulted is not what the service intends to do, in fact this will be avoided at all costs in order to keep the borrowers in the community with their already established accounts. In nearly all situations regardless if the user defaults on their loan they will eventually be given full ownership of their account once the outstanding balance on any active loans they have has been paid off.
Building Use Cases for Hive & Investment Vehicles
One thing that as a developer I've always attempted to do is create applications that have a possibility to attract and maintain new members originating from outside the already established community in order to act as an on ramp into our ecosystem. Without lucrative use cases any crypto currency is merely bytes floating around in the cloud and by providing use cases and investment vehicles it is my hope to attract more and more users into our community. The Hive.Loans service will provide a very lucrative service for a broad range of users, from investor types looking to maximize their return on investment within HIVE to the small time blogger who needs to borrow some capital due to unforeseen expenses popping up.
The HIVE ecosystem is still very much in its infancy, and by developing new innovative services based on the unique abilities of this blockchain we will make ourselves stand out from the hordes of shitcoins currently flooding the markets. Projects like this are true cases of "win / win" and will ultimately be the sort of thing that gets our community noticed by the greater population.
Thank you for checking this post out, more updates will be posted as additional information on the projects development come into fruition. If you'd like to get involved or know more please comment below or get ahold of me in Discord by following the link below in the footer. Have a gooder everyone.
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