Blockchain company INLOCK has announced on Thursday the launch of a peer-to-peer crypto lending platform to allow retail investors to utilize their crypto holdings.
According to the company, the platform will boost the purchasing power of digital currencies as anyone with an amount of crypto and willing to keep their holdings can loan out without spending the digital assets. This will also increase the market liquidity as long term crypto investors can utilize their holdings.
Commenting on this development, Csaba Csabai, founder and chief executive of INLOCK, said: “We have seen far too many examples of people selling Bitcoins to finance their short or mid-term investment goals only to witness the price skyrocket in the following days – especially during 2017. Of course, nobody is able to predict the future, but the next best thing is to keep your options open.”
Massive demand for crypto loans
The crypto startup revealed that, within the first 24 hours of the launch of the peer-to-peer platform, 1220 lending contracts were signed involving cryptos worth over $350,000. INLOCK also saw an average annual percentage rate (APR) of 5.8 percent, while the most favorable APR remained at 8 percent.
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“We receive an overwhelming amount of loan requests from entrepreneurs, business owners, and traders for this very problem on a daily basis,” Csabai added.
To minimize any centralized interference, interest rates on the Budapest-based lending platform is completely dependent on demand and supply on the market.
“Market competition creates the balance between the Lenders profit requirements and the Borrower’s demand for reasonable interest rates. It beats all artificially steered models – it’s all the control we’ll ever need,” David Sabo, business development strategist at the company, added.
Though the value of cryptocurrencies went down substantially since early 2018, digital asset lending businesses are thriving. Last month, New York-based Genesis Capital revealed that it wrote $425 million worth of loans to clients in the first quarter of 2019, the total number for a year was recorded at $1.53 billion.