If you have enough balance in your crypto wallet but lack a healthy traditional credit history, it may be impossible to get a loan from a conventional lender. Thanks to blockchain technology, there are new lenders who assist crypto enthusiasts use their crypto assets as collateral to access finance. One of these lenders is Cred. Formerly Libra Credit, Cred offers fiat and cryptocurrency loans backed by digital currency and aims to provide access to credit anywhere, anytime.
What is Cred?
Cred is the brainchild of ex-PayPal executives Lu Hua and Dan Schatt. It made its debut in 2017 with the aim of providing “credit for the real world”. Its token sale in 2018 raised over $26 million in funding. A desktop platform for crypto-to-crypto/fiat lending went live in Q3 2018, while the mobile app was launched by close of 2018.
Cred’s mission is to solve the main issues that bedevil cryptocurrency consumers such as transparency, ease-of-access, and understanding. Many are the times’ consumers feel intimidated when looking to invest in cryptocurrency. According to Brendon McQueen, Founder & CEO of Cred, this is because consumers lack education, in the crypto industry, lack of trust in the industry, as well as confusing product offerings.
The unique position of Cred will address this issue head-on by offering an easy-to-use platform that allows users to track the progress of the cryptocurrency invested, receive daily market recaps, news updates, and learn about each coin before investing.
Cred offers loans in a decentralised lending ecosystem based on the Ethereum blockchain. These loan products are ideal for the demand for credit that traditional banks cannot fulfill. The main target is people with crypto assets, first-time borrowers and citizens in developing countries.
The Cred ecosystem comprises a proprietary AI-based credit model for risk assessment and multiple partnerships with e-wallets, decentralised exchanges, stable coins, identity verification, and KYC.
You can access loans in a seamless digital lending process which involves 5 steps. This includes application, verification and credit assessment, confirmation, collateral deposit, and disbursement. A borrower can pledge any crypto- asset as collateral and receive loans in their desired assets.
Key features of the platform include:
- Extensive exchange partnership network
- Diversified sources of credit funds including individual lenders, financial institutions, and stable coin providers.
- A collateral grade algorithm to verify the volatility of collateral assets
- In-house proprietary AI-based credit models
- Identity-verification platforms to outsource the verification process
- Reduced-interest repayments when you use LBA (CRED’s native token) as collateral
- Single digit interest rates
- Fast access to credit
Why Buy Cred?
The blockchain ecosystem is easy to explore and conquer. According to the World Economic Forum, 10% of global GDP will be on blockchain by 2025.
In 2017, roughly 2.2 trillion of new corporate bonds were issued in comparison to $780 billion in new corporate equity. But despite its massive size, the debt markets face a myriad of issues. They include
- Liquidity risks
- Barriers to interoperability between markets and regions
- The heavy concentration of players crucial to market operations create a single point of failure
Cred has one of the strongest team with solid development after ICO. Partnerships with UPA, Uphold, and Binance labs could help mass adoption of the platform, as well as create opportunities beyond the exchange listing. Given that 40% of the world’s population is unbanked, Cred could open the door for everyone to lend, borrow or invest. Though not completely risk-averse, blockchain-based lending platforms such as Cred can offer borrowers and lenders a transparent, global, rewarding experience.