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Future of cryptocurrency lending


On the second day of the Indonesia Blockchain Week 2020, some experts talk about peer to peer cryptocurrency loans. Various personalities and experts from the crypto world participated in this panel, among which is Justin Sun, CEO of TRON.

Financial loans with cryptocurrencies: a remarkable evolution?

Decentralized financial loans allow users to lend their crypto assets in exchange for interest-bearing returns. The nature of crypto assets allows anyone to lend their assets on different platforms at minimal cost.

Then, with smart contracts, Blockchain now allows to follow pre-established parameters to issue, monitor and service loans. These have variable interest rates that adjust automatically in relation to the supply and demand of any given asset.

To dig a little deeper into this idea, Tokocrypto invited the founders of various cryptocurrency lending platforms to get their opinions.

In addition, the main objective was to share how people can use these platforms to maximize the profits of their cryptocurrencies with passive income.

Experts talk about the development of P2P loans with cryptocurrencies

Justin Sun (Tron), Wei Zhou (Binance), John Izaguirre (Ontology), Stani Kulechov (CEO of Aave, Brian Condenanza (Bidao), David Truong (Aave) and Vishakh (Cryptonomic) participated in this session. panel was led by Wei Zhou.

The first to give his opinion was Izaguirre. He assured that it is interesting how the Blockchain ecosystem has developed in the last year. For him the economy with cryptocurrency loans is “The smartest way to improve the (crypto) ecosystem itself”.

He also commented that for him with a correct adoption this could penetrate the financial ecosystem in a much more mature way. As for his expectations, he showed that for him this system is only going to continue expanding, with more players and more tools.

In the same way, Brian Condenanza de Bidao, said that for him “It is important to give people the opportunity to make more money and have a passive income with better returns than in the banks”. He listed the P2P cryptocurrency loan as a “great opportunity for people“In the short term. “Although there is a lot of speculation in terms of the price of cryptocurrencies, much of the cryptocurrency lending comes from traders”, he sentenced.

What role are they playing?

Speaking of Ontology’s efforts, Izaguirre highlighted that: “We recently launched our dashboard where users can see where their crypto assets are, regardless of their wallet or the Exchange they used to acquire them.”

He then added that this way they can see their entire investment portfolio, manipulate it, play with it and get scores for it. “You get a financial score based on your profits and losses. This is important because it takes you out of a ‘Blockchain bubble’ or a ‘B2B loan bubble’ and brings the practicality of the traditional asset market. “, he assured.

Next to speak was Stani Kulechov from Aave. According to him, the loan system is basic to any existing financial market. In the case of traditional markets, he commented that these are built through layers on which new things emerge, but that in the case of cryptocurrency loans this was not always the case.

Stani Kulechov, CEO of Aave, offered some opinions and perspectives on peer-to-peer cryptocurrency lending and DeFi technology on the second day of Indonesia Blockchain Week 2020. Source: Indonesia Blockchain Week 2020
Stani Kulechov, CEO of Aave, offered some opinions and perspectives on peer-to-peer cryptocurrency lending and DeFi technology on the second day of Indonesia Blockchain Week 2020. Source: Indonesia Blockchain Week 2020

When we started there was no such thing as a loan facility or stablecoin, and even the collateral assets that were there were illiquid”He commented. However, he stressed that that was why they started with a “peer to peer” loan model.

Kulechov argued that the idea was to ensure that: “We didn’t take the risk, because back then the DeFi was not as optimistic as it is today. You had to build with code that was immutable and imagine the worst possible scenarios, and keep that in mind when building things. “.

More details about it

Responding to the question about their contributions to these initiatives, the CEO of Aave said: “We were able to move to systemic models that little by little have made more liquidity available. I think this space has evolved quite a bit from rather primitive proofs of concepts ”.

He then commented that P2P cryptocurrency lending and DeFi is becoming the business model protocol, in the sense that there are now incentives to use this financial ecosystem.

“If you can get better stablecoin loans than you would from your bank, that’s pretty amazing.”

Stani Kulechov, co-founder of Aave

What benefits are P2P cryptocurrency loans bringing?

In this panel, it was interesting to hear the experience of Condenanza, who is originally from Argentina. Therefore, he commented that there “People are only allowed to buy $ 2,000 a month and a lot of people are starting to use cryptocurrencies as a way to get more into different financial opportunities. They know that the government cannot take them away ”.

He then clarified that “These are people who are not interested in the normal system or the normal crypto market. They are not going to invest in ETH, BTC or something like that. But they choose access to US dollars, for example “. For this reason, he commented that in the long term he sees these loans as applicable in places where regulations limit their citizens.

Where are they bearing fruit?

Then it was Vishakh’s turn, who on behalf of Cryptonomic, gave some interesting opinions. “I think P2P lending is doing well in places like Indonesia. There are many markets that are neglected and they are quite large, so there is this great opportunity in P2P and people are taking advantage of it “he commented.

He also took the opportunity to highlight the following: “Something interesting is that I saw in the Financial Times, is that, despite this global pandemic, the default rates of peer loans have not increased that much.”

“We must know that there is a global appetite for peer-to-peer lending. (…) There is a great opportunity to combine these efforts that are taking place, to give a benefit to a large number of people ”.

Vishakh, Cryptonomic.

Regarding the institutional point of view, the expert from India commented that he believes that many people are watching it with interest. Loans with cryptocurrencies “They have the potential to build a more resilient and inclusive financial system, and at the institutional level we can create great high-level benefits by adding more liquidity to the system.”

Justin Sun’s views on peer-to-peer cryptocurrency lending

The well-known CEO of Tron, established how optimistic he feels regarding this issue. “I think we have seen a lot of demand for cryptocurrency loans, especially to finance mining farming projects”.

Sun deepened saying “If I want to mine cryptocurrencies it is expensive, so I can borrow cryptocurrencies on different platforms and basically the only thing I need to pay is interest”.

As for the future of these processes, Sun spoke of two phases. “The first phase is to continue building the markets for crypto loans. The second is where we will see many traditional investors interested in P2P loans, since if they can borrow in USDT or any other stablecoin they can do traditional business as well.

To support his idea, he cited the case of Ethereum, whose network is increasingly busy and crowded, while hundreds and thousands of dollars are seen in each transaction.

Additionally, he commented that it is considered “Quite bullish in this market and I think at the end of the year we can see Ethereum, Bitcoin and I hope TRON, break all-time high, because I think DeFi is stronger than the ICOs of before ”.

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