Things you should know about P2P Crypto Lending Exchanges
P2P (Peer-to-Peer) lending platform is a place where the lender and borrower connect without the presence of middlemen. In the general market, middlemen are usually banks and other financial institutions. By getting rid of the middlemen, the two parties involved deal with each other directly.
The same theory is applied to P2P crypto lending software. Instead of fiat, cryptocurrency is borrowed and lent through the exchange. Issues such as lack of security, transparency, and reliability are solved to a major extent because the transactions take place on a blockchain.
to regular markets, borrowers can decide the amount they want to
borrow and the time duration of the loan. They will have to repay the
amount with a pre-defined interest amount calculated by the exchange.
are P2P Crypto Lending Exchanges?
main aim of the P2P crypto lending platform is to bring the lenders
and borrowers together on a single platform to facilitate
transactions between them. The platform should take care of
multi-layer security, KYC, and AML verification for the lender and
the borrower to promote safe and secure transactions.
borrower can be an individual or an entity. The credit rating of the
borrower is not taken into consideration. This allows the platform to
be accessible by a wider spectrum of the market. The lender is
usually an individual who would be offering crypto funds to those who
need them. Both the lenders and borrowers should first create their
profiles on the platform for the purpose.
Do P2P Crypto Lending Exchanges Work?
The working of a P2P crypto lending exchange is quite simple and easy. It starts with the two main parties opening their accounts on the exchange and creating their profiles by submitting the required information.
information typically includes name, phone number, address, bank
account details, and the type of investment the lender wishes to
lender should also set the specifications about the type of
borrowers they would like to deal with.
the account is created, the lender has to wait for a request from
borrower also submits personal details, such as name, address, phone
number, and ID proof.
borrower has to submit collateral (includes crypto coins, guarantor,
or legal documents).
the account is created, the borrower places a request for a crypto
loan on the exchange.
of the Process:
matching engine of the exchange compares the request with the
criteria set by the lenders and suggests a perfect match based on
the terms and conditions.
lender receives the request and set up an interview with the
borrower to discuss terms, if necessary.
lender has the right to approve or reject a loan request.
the request has been approved, the loan amount is credited to the
lender starts earning interest for the same. Once the duration ends,
the borrower pays back the total amount.
the borrower fails to repay, the collateral is sold in the open
market to recover the loan amount.
is P2P Crypto Lending Famous?
following factors have made P2P crypto lending software famous in the
There is no credit check involved when applying for a loan. Borrowers are expected to pay collateral when they open an account on the lending platform.
The interest rates for crypto lending are lower than the interest rates for fiat loans.
The process of lending and borrowing is streamlined and automated.
The blockchain makes the entire process transparent and secure.
The P2P crypto lending exchange offers flexible interest calculations so that the borrower and the lender can calculate how much interest would be accumulated for the said amount per day, per week, per month, per quarter, or per year.
Traders find it easy to borrow cryptocurrency for a short while instead of selling their assets while the market is volatile.
say that the popularity of P2P crypto lending exchanges will only
increase as more and more people start looking at it as an affordable
alternative option of getting a loan. With crypto markets gaining
more traders, the lending platforms are here to stay. Companies that
are planning to develop P2P lending exchanges should start working on
the project immediately.
We, at Antier Solutions, offer customized P2P crypto lending software development services to navigate your development journey. We offer a white label P2P lending solution to accelerate deployment, and on the contrary, we can build a custom crypto lending platform for you from scratch, as per your business model.