When I began researching lending platforms in the crypto space I was initially surprised at just how many lending platforms there are out there. It then struck me that with all that competition a lot of these platforms might just fail. However, when I looked at just how much lending was worth in the world economy (according to the Alternative Credit Council (ACC) the global direct lending market is expected to surpass 1 trillion US by 2020) I realised that there was plenty of room for everyone. The new cryptocurrency financial lending space is ripe for platforms that work and block chain gives many advantages over traditional wall street lending institutions.
Given the sheer amount of lending platforms I’ve decided to just focus on 3 that I believe have the idea, the team and the staying power to take advantage of the new frontier of crypto lending.
Nexo
The Nexo platform launched live in April of this year. The first lending platform to offer instant crypto-backed loans. How the platform works is that clients have a Nexo wallet to which they add their crypto asset. They are then able to draw down the loan. Payment is then made back to the wallet at the end of the loan period which unlocks their crypto asset and allows them to withdraw it. Basically, just like MoneyToken, it allows clients to access a loan without losing their position in crypto and similarly there are no credit checks and approval is guaranteed.
A standard loan of $1000 (as displayed on the Nexo website) would cost one repayment of $1080 after a year (8% APR). As well as discounted interest rates on loans another utility of the NEXO token is that holders receive a passive, monthly distribution of 30% of company profits based on the amount of tokens held. NEXO tokens are also accepted as collateral for loans on the platform.
Nexo is backed by ‘Credissimo’, a leading fintech group based in Europe with more than 10 years experience in online consumer lending. As for the following 2 lending platforms, Nexo is very much orientated towards compliance and Credissimo has been continuously audited by ‘Deloitte’. Strategic partners include BitGo, Polymath and Onfido.
Lendingblock
The Lendingblock ICO ended in April of this year and the LND token was listed on IDEX and HitBtc. Given the small market cap of 10 million the token has huge potential for growth. Also, the price of the token is currently under $0.005 so investors buying in now could potentially see huge returns.
Lendingblock is unique in that it offers cross-chain crypto to crypto loans where lenders and borrowers are matched securely and instantly. Also, the platform is aimed specifically at the larger financial institutions such as hedge funds, investment managers, market makers etc.
One area which Lendingblock pays particular attention to is ‘complete regulatory compliance’. Wall street will only fully enter the crypto space when it believes that it is totally safe to do so. Fully regulated financial platforms will attract the big fish and it could be a good bet that Lendingblock, fully compliant, with its knowledge and contacts in the institutional lending space, will be the go to lender for the big investors.
Talking of knowledge and experience, the Lendingblock team is headed up by Steve Swain and Linda Wang, CEO and CCO respectively and co-founders. Together with the rest of the team they have huge experience in fintech and institutions such as Credit Suisse, Barclays, Deutsche Bank, Société Générale and JP Morgan.
Partnerships so far include ‘Octagon Strategy’ a global top 3 digital asset brokerage firm and the largest digital asset broker in Asia-Pacific. More recently Lendingblock signed a partnership with ‘Quoine’ which owns the Japanese exchanges ‘Quoinex’ and ‘Qryptos’. Quoine is presently engaged in rolling out their ‘Liquid’ platform which involves providing liquidity to the entire crypto space through the ‘World book’.
MoneyToken
When I first looked at MoneyToken I wondered if this was really just too good to be true. The initial price to buy the token was 0.005 and the token will be available to the public at 0.05 on their platform, a 10x gain before we even start!
MoneyToken offers loans against crypto currency asset collateral. Loans can be in fiat or also in the ‘Circle USD coin’ stable currency (backed by Bitmain and Goldman Sachs). IMT is not needed to obtain a loan on the platform but if you do own IMT it can be used to acquire preferential interest rates on the loan. Also, IMT can be used to enable lending and therefore receive interest on the sum lent on the platform.
Loans require no credit history or investigation as the collateral ownership is deemed sufficient — therefore loans are extremely fast. MoneyToken is presently working hard on regulatory compliance in all jurisdictions in order to make loans available globally. This will be of special interest to certain areas of the world such as Africa and Latin America where loans are either ridiculously difficult to obtain or have ruinously high interest rates.
MoneyToken has its own large credit fund and so liquidity does not appear to be a problem (a problem which certainly does have repercussions for other crypto lending platforms).
The team is very strong with much experience in fintech companies and banks such as Goldman Sachs, Prudential Financial and CitiBank. Advisors include ‘Founder of Bitcoin.com’ Roger Ver.
Loans on the MoneyToken platform are available now and the IMT token will be listing shortly on a big exchange — likely to be Binance.
Conclusion
Even though the above 3 lending platforms are sharing the same financial lending space they have quite distinct offerings. MoneyToken offers fast, no checks, crypto/fiat loans with crypto collateral. Lendingblock targets the large institutions with crypto to crypto cross-chain loans, and Nexo gives rapid fiat loans with crypto collateral. I’ve singled out these 3 lending platforms because of their strong business ideas and their experienced teams. Another year down the line and I expect all 3 to be firmly entrenched in a crypto lending space worth many billions of dollars.