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A deeper look

What’s a personal fixed income fund?

Crypto Fixed Income Funds replicate Fixed Income Funds from traditional finance.

You define your preferences - either you prefer short-term lending (with less APY) or longer-term lending (with more APY). You can mix different maturities, and you can mix variable interest rates and fixed interest rates.

After that, you deposit your funds. That’s it.

Then an algorithm makes automated investments for you to help you earn more.

However, there are big differences compared to traditional Fixed Income Funds - there is no sharing with other investors, there are no fees, and the funds belong only to you.

You will be able to earn interest with our fully automated personal Fixed Income Fund solution.

The investment process is automated: Behind every Personal Investment Fund is a smart contract, which follows the investment rules.

Borrowers don’t need to wait for funds: Personal Investment Funds make automated investments.

Passive lenders will receive passive income: Lenders need to define only their investment rules; they deposit funds, and that’s it. The rest is an automated process.

FIF’s will invest in loans with different maturities: Lenders can get exposure to the entire yield curve, and they can earn a better return on a given risk.

But even more - the passive lenders can mix the variable rate and the fixed rate.

If passive lenders prefer very high flexibility, then they can invest more into the “0-10 days bucket” (this bucket has a variable rate of the Compound protocol) and into the “11-30 days” buckets.

If passive lenders prefer higher APY, then they can invest more into the “31-90 days” or “91-180 days bucket”.

The passive lenders are in control - they decide what is important, they define the investment rules. The FIF’s follow the investment rules of the passive investors.

The Crypto Fixed Income system is suitable for passive investors, providing you with a fixed, safe, and significant income. Moreover, the capital you have does not need to be very high.

You can use SmartCredit.io as a borrower or a lender.

Borrowers will have the advantage of fixed interest rates and low collateral ratios. The collateral ratios are lower because fixed-term loans allow calculating optimal collateral ratios based on the market conditions.
Lenders can define their Personal Fixed Income Funds, which replicate what a traditional fixed-income fund does but without the high fees and with funds that are only in your name that no one else can access.

The borrower enters the loan request and adds collateral to his loan request. The system automatically calculates how much collateral the borrower needs to submit.

The lender can then accept the borrower’s loan request and transfer the funds to the borrower. Smart contracts will keep the borrower’s collateral until the end of the loan term.

At the end of the loan term, the lender will receive the principal and interest payments from the borrower.

If the borrower does not pay, the system will liquidate the borrower’s collateral, and the proceeds will cover the principal plus interest payments.

If collateral liquidation proceeds are not enough, the loss provision fund will jump in and fill the gap.

Additionally, the lender can define a Personal Fixed Income Fund. When this occurs, the entire process is automated for the lender, allowing them to earn some passive income on their assets.

As you see, we’ve two products for income seekers; Crypto Lending and Crypto Fixed Income. Crypto fixed income is an automated algorithm that invests for you. Crypto lending is manual, so if you want to create supply for the requested loans automatically, continue with Crypto Fixed Income; if you’re going to do this manually, continue with crypto lending.

  • Non-custodial lending: only borrowers/lenders control their assets; no one else has access to the borrowers/lenders assets
  • Borrowers have low collateral requirements
    Wide choice of collateral for the borrowers
  • Fixed-term loans: this allows borrowers to reduce the collateral requirements
  • Fixed interest loans: this protects borrowers and lenders against the herding movements on the markets and the resulting fluctuating interest rate
  • Personal Fixed Income Funds enable a passive income for passive investors
  • Widgets for integration: SmartCredit.io offers borrow and lend widgets for the integration partners. These widgets are easy to integrate. And integration partners will earn the loan origination revenues.

People are used to the traditional financial system. And so, we are usually not thinking about how this system is working. But, the reality is that the traditional financial system has strong side effects on society (which were very visible during the Lehman crisis):

Privatizing the benefits: If times are good, the banking system generates high profits and is paying high bonuses. However, what happens if the times are not so good?

Socializing the losses: If the times are not so good, then the governments have to jump in and to re-capitalize the banks. It’s because so far, the banks are essential to keep the economy running. But, of course, no one is claiming back the earlier paid-out bonuses or profits.

The traditional financial system is not sustainable. That’s why we need an alternate financial system. That’s why we need a blockchain-based financial system – and that’s why we created SmartCredit.io.