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Borrowers will have a much lower collateral ratio than other platforms (for example Compound and Aave money-market funds).
Borrowers will have a wide choice of collateral.
Borrowers will have a fixed interest rate, there is no danger of fluctuating interest rates (for example entering a loan contract with a low-interest rate and seeing how the interest rate will explode).
Merchants can sell their products on credit to their clients, they just need to integrate SmartCredit.io widgets.
Clients would earn the merchandise and Merchant would receive the Credit-Coins (ccDAI, ccETH, …), which represent the underlying loans.
Merchant will be liquid with the Credit-Coins, he can submit them into the conversion orders in the order book, where the Personal Fixed Income Funds will pick it up and will return ETH or DAI to the merchants.
When Merchant will use traditional credit-cards, then his total costs can be up to 5% (transaction fees + VISA is returning the funds with a big delay). When Merchant is using SmartCredit.io, then his total costs will be perhaps 1% – 1.5%. This means Merchant will just earn more profit.
People are used to the traditional financial system and they are not thinking so much about how this system is working. However, the traditional financial system has strong side effects on society (which were very visible during the Lehman crisis):
Privatizing the benefits: In traditional credit systems, the interest rates brought by the loans bring benefits to the commercial banks. In the crypto credit system that is completely P2P, Smart Credit aims to distribute the benefits among all lenders by destroying the traditional credit system where only a few actors share their benefits.
Socializing the losses: The crises caused by the centralized economic system, which reached the point of obstruction, had a negative effect on all investors, users, and providers. And the responses to these crises are socializing of the losses.
The traditional financial system is not sustainable. That’s why we need an alternate financial system. That’s why we need a blockchain-based financial system – and that’s why we created SmartCredit.io.