Start earning interest on crypto with 3 easy steps.
Unique solutions for your DeFi experience.
The borrower enters the loan request and adds collateral to his loan request. The system automatically calculates how much collateral the borrower needs to submit.
The lender can then accept the borrower’s loan requests, and he will transfer the funds to the borrower. Smart contracts will keep the borrower’s collateral until the end of the loan term.
At the end of the loan term, the lender will receive the principal and interest payments from the borrower.
If the borrower is not paying, the system will liquidate the borrower’s collateral, and the proceeds will cover the principal plus interest payments.
If collateral liquidation proceeds are not enough, then the loss provision fund will jump in and will fill the gap.
Additionally, the lender can define a Personal Fixed Income Fund – if he does this, then the entire lending process is automated for the lender. The lender can earn so passive income on his assets.
As you see, we’ve two products for income seekers; Crypto Lending and Crypto Fixed Income. Crypto fixed income is an automated algorithm that invests for you. Crypto lending is manual, so if you want to create supply for the requested loans automatically, continue with Crypto Fixed Income; if you’re going to do this manually, continue with crypto lending.
People are used to the traditional financial system. And so, we are usually not thinking about how this system is working. But, the reality is that the traditional financial system has strong side effects on society (which were very visible during the Lehman crisis):
Privatizing the benefits: If times are good, the banking system generates high profits and is paying high bonuses. However, what happens if the times are not so good?
Socializing the losses: If the times are not so good, then the governments have to jump in and to re-capitalize the banks. It’s because so far, the banks are essential to keep the economy running. But, of course, no one is claiming back the earlier paid-out bonuses or profits.
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.