Crypto-backed Loans in India

In our last posts, we spoke about How Crypto Backed loans are different from peer-to-peer loans, what are the different types of crypto loans, advantages of crypto-backed loans, Risks associated with crypto lending, crypto lending platforms in US, Crypto Lending Platform in UK and Crypto Lending Platform in Europe. Continuing our discussion further on Everything you need to know about Crypto-backed loans, today we would talk about different crypto lending platforms in India

While India is still figuring out should they treat cryptos as commodities or ban crypto trading, a startup in India Nuo Bank with their product getLend is offering lending services. Let’s take a closer look –

Crypto Lending Platforms in India

Nuo Bank

Nuo a start-up from India aims to offer a decentralized and transparent debt platform. It is a Blockchain based Bank that allows you to buy, hold, lend, loan cryptos on the Ethereum network. They have launched an Android app, that offers the flexibility of buying cryptos and storing it as well. Nuo Lend another platform helps in connecting borrowers and lenders. Nuo lend comes in three flavors-

Peer to Peer Loans

It is a lender-borrower network where a borrower could submit a loan request and deposit his ERC20 tokens onto the safe wallet with NuoBank.Using the decentralized lending platform the lender could earn an interest rate by funding a loan and the borrower in need of money could use his crypto tokens to get extra cash.

Bonds Marketplace

A financial marketplace to buy, sell and discover non-fungible tokenized assets traded as ERC71 bonds through auctions.

Margin Funding

A peer to peer network of margin traders with shared liquidity and up to 10x leverage. Before digging deep into the business model, let’s figure out what is crypto margin trading?

What is Crypto Margin Funding?

In simple terms, its Crypto Margin trading is where a lender offers a loan to a trader to invest. While the lender earns interest on the debt offered, the trader could earn a profit[with an increased investment]. Let’s take an example – if you are staking 5$ with a 5:1 leverage would mean you are placing a bet of 25$ in the open market. Now, as a trader, you would need to pay the borrowed money and also the fees or the interest attached to it. Hence, traders expectations and speculation is that the gain would be sufficient to cover the interest and make him earn a profit.

How Nuolend Margin Funding Works?

The NuoLend platform would connect Margin traders and lenders so as to facilitate margin trading. Each Margin trader needs to put his ERC20 tokens as collateral to get funded, and if the value is dipped, the collateral would be liquidated to pay the loan amount.

Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

If you liked our post, please follow us on twitter [@getnuo] to get latest updates and insights.

 

3 Rules of Crypto backed Loans Every Investor Should Know

Investment of any sort is risky and is mostly played by rules by all genres. Even a child when he sets up a trade of toys exchange quickly analyze benefits he could reap and risks he could face, then how could the world of crypto backed loans be spared? Today’s post is all about the rules, precautions to be taken while signing up for crypto backed loan.

Three Rules of Crypto backed loans

 

Rule #1 – Diversify your Portfolio

Distributing your investment to multiple borrowers based on loan amount, geography or duration is the first rule to be followed. So, for example, if you have planned to invest 10 BTC amount, then break it into chunks, i.e., funding 2BTC for five borrowers that is a mixed bag of long term or short term and belongs to developing and developed nation.

By choosing among the developed/developing nation, you are reducing your risk of default, and while long-term loans help in reducing the workload of follow-ups, short-term offer the benefit of reinvesting and improving liquidity. So choose accordingly.

Rule #2 – Know the Risks

While lending offers benefits of high returns, it is still in a nascent phase with very less awareness. So if the borrower fails to repay the amount, would it lead you to bankruptcy? Or analyze the amount of how much you could lose say the borrower is new and does not have much knowledge on the latest technology, so make sure all of your eggs are not in the same basket. Crypto backed loans are high on returns but also come with high risk.

Rule #3 – Analyse, Learn and Realign your investing techniques

Well, there is no rulebook of crypto backed loans technique that one could follow and eliminate risk, but make sure once every fortnight or even monthly analyze your crypto portfolio in terms of returns and realign or redistribute to make it profitable.

All it takes is time and perseverance to get good returns on crypto backed loans; it’s like sowing the seeds and watering it daily until you see the flowers and finally fruits. However, beware of harsh sunlight, thunderstorm, weeds, and pests that could harm your investment.

Happy investing!

If you liked our post, please follow us on Twitter [@getnuo] to get the latest updates and insights.

Top Five Cryptocurrencies as per Market Cap

Bitcoin, Litecoin, Zcash, Cardano, Ether, Dogecoin, Tether, Titcoin, Potcoin, Auroracoin, Primecoin, Swiftcoin just to name a few of exploding cryptocurrency market. As per investing currency list, there are 2260 cryptocurrencies listed on the market as of 14-Sept. As of 15, March 2018 there were 1658 cryptocurrencies, a whooping upward growth. While launching a crypto may not be much of significance, but getting a position in the market is indeed a tough job.

As of March, the cryptocurrency market capitalization was under $369 billion, that indicates that each of the cryptocurrency in March was worth of ~$222 million. However, that’s not the fact – the top 20 leading cryptos account for 89% of the total market — the other 1,638 cryptocurrencies are worth a combined $39.6 billion.

In fact, if you try listing cryptos with the largest market capitalization, here are the top five cryptos as of writing this article –

top 5

As experts recommend while placing your bet choose the one with the market capitilization[total coins that will ever be produced times current value], the coins potential to survive in the market and the ease with which a coin can be traded for fiat currency like the US dollars.

While market cap, its potential to survive and ease to convert are some of the best bets, Traders owning cryptos other than Litecoin, Bitcoin, Ethereum; Bitcoin Cash also find it hard to trade them for actual fiat. Most of the coins could be traded at online cryptocurrency exchange, and individuals could also buy stuff online, but converting it into a fiat means –

  1. First converting it into a significant cryptocurrency [like BTC or ETH]
  2. Then get USD against it.

So even though a USD value is listed against each of the cryptocurrency, that does not signify you can liquidate it as per your wish.

Crypto Loans Platform in Europe

In our last posts, we spoke about How Crypto Backed loans are different from peer-to-peer loans, what are the different types of crypto loans, advantages of crypto-backed loans, Risks associated with crypto lending, crypto lending platforms in US and Crypto Lending Platform in UK. Continuing our discussion further on Everything you need to know about Crypto-backed loans, today we would talk about different crypto lending platforms in Europe.

The two firms from Europe – Ethlend and Nexo are making much noise in crypto communities. While each one differs in the way their business model work, they have been working hard to capture the customer base and innovate crypto-backed loan space. Let’s take a closer look –

Crypto Lending Platforms in Europe

Ethlend

Ethlend facilitates decentralized lending on the Ethereum network. Ethlend lending works by lending Ether units and not by lending fiat currency. Also, Ethlend loans are backed by collateral as ERC-20 tokens and not Ether or bitcoin. They accept all kinds ok token like Vibe Coins or OmiseGO or Golem to name a few.

For a borrower on the Ethlend platform, he needs to deposit his ERC-20 token and lenders need to deposit their ether. Then Ethlend contracts make the switch and loan have started. The borrower now needs to pay the interest amount in Ether, failed to do so provide the lender a right to claim the deposited collateral.

Nexo

Nexo using blockchain technology provides loans directly to the borrowers. NEXO itself provides the funding, so you may not might additional lenders on their platform.

Nexo offers loans outside Europe in USD and EUR with no credit scores check. The borrower could also repay the loan amount using USD, EUR, Bitcoin, Ethereum or Nexo Tokens[the first SEC-approved security token]. One of the advantage borrowers receives while using Nexo token is a discounted interest rate. Nexo token holders also get a dividend as a percentage of the firm’s profits. While dividends, discounts may be overwhelming for the borrowers being SEC approved they are risk averse

What are the Risks of Crypto-backed loans?

In our last posts, we spoke about How Crypto Backed loans are different from peer-to-peer loans, what are the different types of crypto loans, and advantages of crypto-backed loans. Continuing our discussion further on Everything you need to know about Crypto-backed loans, today we would be targeting the risks associated with crypto-backed loans or crypto lending.

No technology or concept is fool-proof, so while there are many advantages associated with crypto lending, there are some risks associated with it, that could be mitigated if you are an informed person. Here are some of the risks of crypto lending –

Platform Safety

There are two kinds of platforms that connect a borrower/lender in crypto lending. First being the firms offering their software solutions, connecting lenders/borrowers and charging a small fee for the platform. On such a platform, it is crucial to know about the security aspects followed by them. Has there been a past breach? If the data was hacked? Also, it would be good to know the kind of measures provided by the firm in case of hacking. Simply know all aspects of security measures and policies offered by the platform provider to safeguard your assets from being hacked.

The other entity is the online cryptocurrency community where borrowers/lenders interact directly with each other. In such cases, as it’s an independent contract executed by the borrower and lender, there are less/negligible chances of any assistance in case of disputes of defaults or in case of scams.

Default Rate

Blame it to regulation or difficulty is repaying the loan, but crypto-backed loans come with a possibility of higher defaulters when compared to peer to peer loans.

Volatility

Crypto market is up and running all throughout the day, so while arbitragers try to make a profit out of it. The lenders/borrowers might suffer a set back if the money repaid/borrowed has dipped throughout the day. In fact, many investors might see a possibility of seeing an assets’ value depreciated to a point where the debtor is better off defaulting than repaying the loan.

 

Refrences

finder, fastinvest.

Advantages of Crypto-backed loans

In our last posts, we spoke about How Crypto Backed loans are different from peer-to-peer loans and what are the different types of crypto loans. Continuing our discussion further on Everything you need to know about Crypto-backed loans, today we would be targeting the benefits of crypto-backed loans or crypto lending.

Involving blockchain technology into lending could make the product offerings cheaper, faster and much more transparent to borrowers and lenders. Transactions powered by Blockchain are instantaneous and indisputable, that also comes along with – no transaction fees clause. Fundamentally,  leveraging blockchain technology with peer-to-peer lending offers following benefits –

Negligible Transaction Fees

Under the P2P lending process, when a borrower initiates the loan request, it goes to a bank/financial institution’s that charge you fees for processing, documentation, or early payment charges, that was mostly applicable to the borrower. If we refer to Processing charges by Banks in India, it could go up to 20000 INR, on the other hand, crypto-backed loans do not have any processing or transaction charges. Only if you are using the platform [like Nexo, Nuo Bank, Ethlend, etc.], they might be charging you with a small amount. So crypto-backed loans come with a value of money when compared to P2P loans

No Paper Work or Need of Bank Accounts

While opting for Crypto-to-Cash loan you may need a bank account, but otherwise, there is no need of any paperwork or bank account while picking a crypto-backed loan. It also helps in targeting the individuals at the lower level of the pyramid, which is unbanked and cannot provide the required KYC documents.

No Boundaries, Loans Diversified

P2P lending mostly works in restricted geographies’, however, crypto lending could open gateways to cross-border lending, offering diversification to both lenders and borrowers. Crypto-backed loans offer an opportunity to the lending community to diversify their portfolio across different continents and countries. While lenders can take advantage of cross-country diversification, borrowers get a global pool of lenders. A win-win for both.

 

References

Hackernoon

 

Different Types of Crypto-backed Loans

Our last post spoke about the differences between the peer to peer lending and Crypto lending if you didn’t get a chance to check here is the link. Taking a step further today we would talk about different types of crypto-backed loans available in the market.

The crypto assets market is still in evolving phase, and earlier where the crypto world only witnessed holders and miners as the market participants, another group emerging in cryptosphere of – issuers, investors, lenders, borrowers demanding exotic flavors in lending services. The flavors available now are in a basic form that allows holders of crypto assets to generate income from interest earned.

Types of Crypto-backed loans

Crypto-to-Crypto Lending

The arrangement works for people who have spare crypto and are not using at any time. Just lend your Bitcoin or Ether, or Altcoins agree to the smart contract and earn an interest rate for a given period of time. It helps users or businesses to earn extra cryptos just by lending it.

Firm offering Crypto to Crypto Lending – Coincheck, Lending Block, Nuo Bank

Crypto-to-Cash Lending

The model works with businesses/users who are holders of cryptocurrency and in need of Cash. So the cryptocurrency like Bitcoin, Ether or Altcoin work as collateral and the user gets the cash in hand. The cash amount is usually credited to the bank account linked, the borrower needs to make monthly payments and once the amount is fully paid the collateral is reimbursed.

Certain kind of conditions are applicable in case of Crypto to cash lending like in case if the collateral price is dropped by a specific percentage say 25-30, the lending service platform can request for more capital.

Firm offering Crypto to Cash Lending – Unchained Capital, SALT Lending

Margin Funding

It is a unique service offered currently by Bitfinex, which allows individuals/users to fund in multiple currencies to Bitfinex traders. The interest rate, duration could all be decided by the individual who is funding it.

In such case, a user could earn a passive income by lending USD/cryptocurrency depending upon the trade volume and price at a given time.

Firm offering Margin Lending – Bitfinex, Nuo Bank [Launching Soon]

 

References

Bitcoin, Asd,

Ethlend vs Salt: Which is the Better Crypto Lending Platform

The new entrants that entered the crypto lending arena towards the end of 2017, are about to complete a year of operation. So how do they stand in the evolving market – SALT vs ETHLEND. Coincentral compared the two startups in the category of What is Ethlend and What is SALT, the benefits of each and some of the potential risk involved.

Do take a closer look at coincentral.


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

Introducing Long Term ETH Loans

The bulls are roaring again. A regulated ETF might be on its way. Sensible ICOs are hitting the market and with more regulation and awareness the community is weeding out scams. As you hop on to this bull cycle, there is one important tool that you have been missing which can help grow your assets by providing additional liquidity. Introducing Long Term ETH loans.

Using Nuo Lend, users and institutional investors including crypto funds can raise debt in ETH against other ERC20 tokens without selling them and get additional liquidity for 6 months or even an year in a completely decentralised way.  This would give you enough time to make other investments, wait for investment tokens to list on an exchange and book your profits.

1. To get started, you would need to create a loan request by choosing a collateral token. This collateral will be with the smart contract till you repay your ETH loan. You can then choose a premium (2.5% for every 30 days is recommended) and the duration of the loan (90, 180 or 360 days recommended for long term). You can choose to repay back the loan in 1 instalment or upto 10 instalments.

2. Once you have fill this loan request form, you would need to pay gas (Ethereum Network fees) for creating a smart contract for this request. Once a smart contract is created successfully you would need to authorise and transfer the collateral token to the smart contract. We have over 50 tokens supported for transferring the collateral.

3. Once the loan request is created successfully it would be visible to all the lenders on the platform and will get funded soon. Since the entire Nuo Lend product is completely decentralised and runs on smart contracts you can keep a track of your collateral in the smart contract and ensure that you don’t default at any time. 3 days before the end of the loan tenure, you would get a notification for repayment and you would have to transfer the loan amount along with the interest rate you had promised failing which you would lose the collateral in the smart contract.

Oh and currently the gas price is quite low and your loan request would cost around $3-5 worth gas (network fees) and to compensate for that we are giving you $10 as a crypto cash-back in your account which will make you profitable from Day 1.

Now never miss an opportunity to invest in an ICO because of lack of liquidity. Happy Investing.


  • Borrower Tutorial: Asking for a Loan on Nuo Lend

  • Lender Tutorial: Earning Interest On Crypto by Lending

Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

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