Lendoit is a company that seeks to provide a platform that’s powered through the blockchain which connects lenders and lendees through a better system. They seek to do this by relying primarily on smart contracts in addition to other features.
The reason why Lendoit can be considered something of a trailblazer in this field is due to the fact that they are seeking to be blockchain oriented first, eliminating the traditional institutional banking middlemen and other aspects present in the old system.
The state of Lending Today
It is important that we understand the state of lending today to truly see what LENDOIT brings to the table.
The current lending platforms fall into two categories, the first category is lending done by institutions to individuals, the second is the facilitation of peer to peer lending.The online platforms do not have a need, in many cases to have funds on hand, they simply are able to act as the intermediary. They are able to survive and thrive through their fees that they charge for providing the facilitation of the process.
What the proposed solution can do
If this the new era solution can fully bring to bear the power of the blockchain and integrate all the necessary aspects from the present method in allocating capital this would provide a shift in obtaining capital.
The new process would allow for a lower cost of capital in lower interest rates and minimal upfront charges.
What’s interesting is that these traditional online marketplaces are new, with several of the current players starting out in the early 2000’s and then increasing across the globe from there.
Lendoit notes that the Global Marketplace is growing and may reach $290 billion by 2020, while interests (on a compound annual basis) are supposed to be at least 51% through the years of 2014 to 2020.
The reason why Lendoit would be relevant is if they are able to decrease the cost of capital by fixing the gaps in varying interest rates across the world.This would create an interesting leveling of the playing field in obtaining loans at a standard cost of capital globally.
Lending institutions in nations that have fairly low-interest percentages may not extract and capture the necessary value need from their current lending of loans and would be keen to embrace a better standard.
Borrowers are not always too pleased with the idea of facing onerous fees and higher interest percentages over the life of their loans due to being a in a different country and not because of their individual ability to pay back the loan.
The streamlining of many of these various other factors that affect interest rates that do not have anything to do with the borrowers ability to pay will provide significant benefits if implemented correctly.
The second aspect for many borrowers would be conducting a loan transaction in a transparent manner. The current lack of transparency in many markets cause issues for the borrower in being able to pay back loans that keep growing and outpacing their monthly earnings.
The Comprehensive Lendoit Solution
Lendoit aims to provide a quick, transparent, smart contract oriented solution that is simple to use. Having blockchain and smart contracts as it’s core technology and building process on top of that allows it automatically process loans.
So who are all the players involved in Lendoit’s process? The parties consist of the lendoit intermediary, borrowers, the lenders, debt service collectors and scorers.
The first step for the borrowers is to go through a simple and clean application which allows for the platform to know who their customers is and then they can start to use the platform. The borrower will then be provided with a score from one or two providers which allow for creditworthiness and verification of identity.
The borrower can then go and place a loan request and kick off the process.
At this point, lenders would then compete to provide the borrower with the lowest interest rates and the one who can provide the lowest wins, this competition, of course takes place in a very short time frame.
The system also accounts for the borrowers who will default on their loans by integrating debt collectors who will purchase the loans in default from the provider of loans.
Nuts and bolts of smart contracts utilization
- The Smart Loan Contract will have within itrelevant borrower information which accounts for his/her score, conditions of the loan, process the reverse auction bid of the lender, and then releases funds. The contract also possesses smart reputation, compensation and conversion, other notable to account for default.
- An interesting feature is going to be the secondary market for the trading of loans.
- A key feature that differentiates Lendoit from others is that the borrower does not need to put up collateral to get a loan.
This landscape is rife with competition, and a few of these players include ETHLend (which misses the aspect of protecting lenders in the smart contract, they also possess a form of collateral). BTCPOP is another which does not utilize smart contracts and is focused on loans for potential ventures. There is also SALT, Dharma and Onix that are directly relevant and seeking to compete.
Team and Advisory Board
The team of Israelis for this project consists of various experts in relevant fields, the founders include, CEO OriErez and Vlad Amirov. Notable founders are YoavPinkas, the COO, who brings experience with databases and Avi Ben David, who will provide financial expertise.
Notable advisory board members are prominent cryptocurrency experts, such as, Michael Terpin the founder of BitAngels, CoinAgendaand the Transform Group, Eddy Travia from Coinsilium, Richard Titus and Ram Avissar.
They are seeking to have their token sale in the last quarter of this year, in December and will be presenting their beta early next year.
Lendoit is undertaking something ambitious, for it to have true and pure free marketplace of loans and have standardised rates it must be able to do so in a manner that is in accordance with the various countries rules and regulations. Navigating these murky waters and still providing what they state will be their challenge and how long it will take is the question that needs to be asked.