Friday February 26, 2021
Bitcoin (BTC) $47,639.00   Ether (ETH) $1,503.01
  • Events
  • News
    • Blockchain Technology
    • Capital Raising
    • Crypto Exchanges
    • Crypto Payments
    • Gaming & Betting
    • Networks & Protocols
    • Security
    • Vendor Technology
    • Wallets
NEWSLETTER SIGNUP
EXCHANGE 300+ COINS
CryptoNinjas
  • Crypto & Blockchain Links
  • Real-Time Market Data
  • Bitcoin ATM Map
  • Token Offerings/Listings
No Result
View All Result
CryptoNinjas
No Result
View All Result
Home Blockchain Technology

Blockchain startup ETHLend introduces working capital finance for ICOs

Published by CryptoNinjas.net
07/31/2017

Fundraising within the blockchain economy is about to have a new chapter. ETHLend recently launched decentralized lending on the Ethereum blockchain network, starting with secured lending by allowing borrowers to pledge ERC-20 compatible tokens as a collateral.

Since then, ETHLend has introduced the ability to pledge Ethereum Name Service (ENS) domains as a collateral. The decentralized application (DAPP) is accessible with the use of MetaMask. All transactions are performed on a smart contract, which holds the collateral until the loan is paid back. In case the borrower does not pay the loan back, the collateral is transferred to the lender, who can sell or auction the collateral to regain any losses.

Initial Coin Offerings (ICOs) require working capital

Blockchain startups that have chosen the ICO-path often find that ICOs require resources such as marketing, PR, development, security efforts, translations, and client service. Such efforts require working capital that some blockchain startups might not have.

The use of smart contracts and ERC-20 compatible tokens might introduce a new decentralized way to receive working capital for ICOs or pre-sales of ICOs. Since most of the blockchain start-ups allocate part of token total supply to the venture itself or to developers’ fund, some of these tokens could be used to attract working capital for ICO preparations by pledging the tokens to get a loan and paying the loan back once the ICO is over and funds have been raised.

For example, a blockchain startup could pledge tokens as collateral that covers 150% of the borrowed Ether (ETH) value. If the startup plans to sell 5,000 tokens for 1 ETH in ICO, the startup would pledge 7 500 tokens for every ETH that they borrow and provide an attractive interest rate of 5-10%. The loan maturity would end after the ICO. Therefore, the startup can repay the loan back to the lenders once funded. Such a loan might be attractive to the lenders due to sufficient collateral.

ETHLend’s solution might ease the funding pains of a blockchain start-up and provide passive income for the ETH holder in the form of interest. The solution mimics real-world financing with corporate bonds. Instead, these “cryptobonds” are not transferable and handled completely with smart contracts. Using smart contracts provides more transparency and does not require to trust the counterparty.

To launch such a loan, a blockchain startup simply places a loan request on ETHLend’s decentralized application and send the tokens to the loan smart contract (which will hold the tokens until the loan is repaid). From this point, anyone from any part of the world can fund the loan with ETH.

ETHLend believes that such funding might encourage blockchain startups to perform an ICO when otherwise they would lack funding. Moreover, such funding might decrease the amount of token allocated for sale since the startup has alternative access to finance. Therefore, leaving more tokens for the development fund to attract new talent.

69
SHARES
FacebookTwitterLinkedinRedditE-MailTelegram

Related News

Aave money market protocol now live on the Ethereum mainnet
Networks & Protocols

Aave money market protocol now live on the Ethereum mainnet

01/08/2020
ETHLend rolls business into its new blockchain services parent company ‘Aave’
Strategic Integration

ETHLend rolls business into its new blockchain services parent company ‘Aave’

09/18/2018
Etherisc launches consortium to bring increased protection to crypto lending market
Services

Etherisc launches consortium to bring increased protection to crypto lending market

07/10/2018
ETHLend now optimized for mobile via Trust Wallet DApp Browser
Vendor Technology

ETHLend now optimized for mobile via Trust Wallet DApp Browser

07/04/2018
ETHLend hits record 12,000 Ether (ETH) in lending volume
Vendor Technology

ETHLend hits record 12,000 Ether (ETH) in lending volume

04/17/2018
Load More
Leave Comment

Where to Exchange

Bit2MeLeading Spanish Bitcoin ExchangeVisit
BL3P
European Bitcoin ExchangeVisit
ChangellyExchange & Buy 150+ CryptocurrenciesVisit
itBitAmerica's First Regulated Bitcoin ExchangeVisit
  • Trending
  • Latest
ZelaaPayAE deploys Pundi X's merchant crypto payment solutions for UAE

ZelaaPayAE deploys Pundi X’s merchant crypto payment solutions for UAE

02/24/2021
Bitcoin ATM company Lamassu unveils brand new operator admin system

Bitcoin ATM company Lamassu unveils brand new operator admin system

02/23/2021
Tendermint invests in Tgrade to bolster Cosmos' growing DeFi ecosystem

Tendermint invests in Tgrade to bolster Cosmos’ growing DeFi ecosystem

02/24/2021
DeFi fund manager yAxis launches v2 to make earning interest on crypto more accessible

DeFi fund manager yAxis launches v2 to make earning interest on crypto more accessible

02/22/2021
Crypto exchange technology platform HollaEx gets upgraded suite

Crypto exchange technology platform HollaEx gets upgraded suite

02/18/2021
LATAM bitcoin exchange Bitso secures insurance policy on user's crypto deposits

LATAM bitcoin exchange Bitso secures insurance policy on users’ crypto deposits

02/25/2021
Coinbase files registration statement for proposed public stock listing 

Coinbase files registration statement for proposed public stock listing 

02/25/2021
Lido teams with Unslashed to cover $200M worth of staked ether against slashing risks

Lido teams with Unslashed to cover $200M worth of staked ether against slashing risks

02/25/2021
Boson Protocol partners with Crucible to enable brands and games reward users with real-world items

Boson Protocol partners with Crucible to enable brands and games to reward users with real-world items

02/25/2021
Anchorage raises $80M Series C, led by GIC, Singapore's sovereign wealth fund

Anchorage raises $80M Series C, led by GIC, Singapore’s sovereign wealth fund

02/25/2021
  • Home
  • Directory
  • Data
  • About
  • Contact
SUBSCRIBE

© 2016 - 2021 CryptoNinjas Disclosures | Privacy Policy

  • Home
  • Crypto Links
  • Market Data
  • Blockchain Tech
  • Exchanges
  • Capital Raising
  • Vendor Technology
  • Token Offerings/Listings
  • Payments
  • Wallets
  • Bitcoin ATM Map
  • Conferences & Events
  • About
  • Contact

© 2016 - 2021 CryptoNinjas Disclosures | Privacy Policy


Go to mobile version