Have you ever tried the cryptocurrency lending and borrowing? If yes or no, this article will get you started and introduce you to a new model, p2p lending and borrowing.

Just of recent, I tired lending on ZKSYNC blockchain, project name withheld, after 30+ days, I logged in to withdraw my deposited eth but the response was kinda shocking “can’t withdraw more than this amount of eth” that sus right?

Well, while roaming the crypto verse, I stumbled on a project with better solutions and approach to lending and borrowing.

Grab a bite as I introduce you to decentralized P2P lending and borrowing.

What is lending and borrowing in cryptocurrency?

Lending is a decentralized financial service that allows investors to lend out their crypto/digital assets holding to borrowers.

Lenders are like investors who profit from the interests earned from users who borrowed their funds or assets

Lenders go on to earn interest, this is similar or work is in the same pattern that #Tradfi (Traditional Finance) savings account works.

Having said that, how do lenders lend to borrowers?

From my interactions with lending and borrowing platforms, Investors would deposit their assets into a contract while they can borrow with the deposited assets as collateral also however, borrowers would also have to deposit their collateral into the contract to be able to borrow funds.

This process however great can be improved.

Could there be a better alternative? Yes, a Peer2Peer (P2P) lending solutions similar to FIAT=CRYPTO and vice-versa trading called P2P trading.

A peer to peer trading eliminates the risk of third-party involvement in financial services while carrying out financial activities.

 

A peer to Peer (P2P) Lending Solution

PWN protocol offered a seamless lending experience with the introduction of a peer to peer lending and borrowing service.

What is PWN Protocol? PWN Protocol proposed a p2p lending solutions using any coin/or token as collateral, borrowers can also use their NFTs as collateral.

PWN is a trustless, immutable peer to per lending protocol designed for long-term mortgage-like loans of digital assets, that operates without the need for oracles or protocol managed liquidation.

WHY PWN P2P Lending Solutions?

PWN is a marketplace where borrowers and lenders come together to agree to loan terms of arbitrary tokens backed by arbitrary tokens and NFTs.

There is no risk of asset liquidation since there is no managed protocol liquidation and/or oracles.

PWN is peer2peer hence eliminates the third-party influence such as depositing your assets in a contract before you can lend or borrow.

There’s no asset whitelist, any ERC20, ERC721, or ERC1155 standard assets can be used on the platform

Won’t I get scammed since any token can be used?

To avoid getting scammed by users who may want to borrow or use as collateral assets of no value, PWN implemented the following features.

1.    PWN shows lenders information about the assets as possible so they can decide whether to invest in such loans or not.

2.    Lenders are also advised to DYOR before accepting a borrower offer, too good to be true, may be too good to be true indeed. Always DYOR!

3.    PWN implemented a feature called SHITFILTER, shitfilter automatically conceals loans request with high LTV (Loan To Value) ratio (above 80% and assets lacking valuation on the platform.

So, it is safe to say, NO whitelist, no problem.

How does this P2P Lending Solution Works?

1.    Lenders/Borrowers will sign-up on PWN platform with wallet connect.

2.    Borrower will list their acceptable token as collateral. Acceptable token is any ERC20, 721, and 1155 standards assets across the supported chains. (This stage is off-chain)

3.    Lenders will create offers with terms, this stage is also off-chain

4.    Borrower accept offer and the collateral would be locked. (This stage is on-chain).

5.    Borrower repay the loan, lender get capital and interest back.

6.    What if a borrower defaulted the loan terms and agreement?

The Smart Contract will release the collateral to the lender, and the lender can use anyhow they deemed fit.

How to borrow using PWN Platform?

1.    Navigate to PWN platform (make sure you’re using the official link) and connect your wallet.

2.    Select the asset and amount to borrow and conform loan terms.

3.    Choose collateral and amount of collateral.

4.    Lastly review your borrowing details and submit

 

Worth to note that these activities will not lock your asset or collateral until a lender borrow you.

How to Lend using PWN platform?

1.    Navigate to PWN platform (make sure you’re using the official link) and connect your wallet.

2.    Navigate to lend on the dashboard and scan through the available offers.

3.    Seen the offer that match your interest? Make an offer to lend to the borrower.

4.    After making offer, you’ll wait for the borrower to accept your offer. I call this genius formation, I mean, that’s the essence of P2P.

5.    Once the borrower accepts your offer, your asset which you’re lending would be transferred to the borrower while the borrower collateral would be locked in the contract for the number of days according to the loan terms, might be 30 or more days.

6.    After the loan term expires, the borrower is expected to repay the loan before the loan term expires and in the case the borrower defaulted, the contract would release the collateral.

That’s all, it is simply a masterclass development and I’m looking forward to a massive growth of PWN in coming years.

Disclaimer:

This article is not a financial advice and non-promotional, this is just to educate the community about the peer to peer lending solution.

The use of PWN platform is at users risk, always #dyor