To obtain WBTC, which is an ERC-20 token backed 1: 1 by Bitcoin, you can use a lending process that runs within the framework of the decentralized system of the blockchain world. All financial systems in the world maintain their vitality thanks to the flow of loans. But as long as providing credit is something only traditional banks do, banks are the actors that take the biggest pie of liquidity flow. However, middle-class lender investors, who offer their assets to credit processes, can also profit from this process. What’s more, borrowers can also come across much more advantageous and profitable loan offers than they have in the traditional marketplaces. We, as Smart Credit, have recreated the WBTC Lending process with this liberating financial philosophy.
What is WBTC Lending?
The cryptocurrency lending process, which allows users in need of crypto money to have liquidity quickly, has been popular in the blockchain world for a while. However, approximately 80 percent of WBTD borrowing transactions take place on custodial lending platforms. So what is custodial lending and what exactly distinguishes it from Smart Credit?
What SmartCredit.io Can do for You?
Smart Credit provides a peer-to-peer loan ecosystem for investors who want to borrow WBTC.
Are You A WBTC Borrower?
The main gains of this ecosystem for borrowers are as follows:
- Less time-consuming credit process thanks to low rate paperwork
- Fast validated loan, no intermediates during the loan approval process
- Low rate of collateral requirement
- The high number of collateral alternatives
- Advantageous fair rates
Are You A WBTC Lender?
If you want to become a lender, Smart Credit can give you the following advantages in the WBTC lending process:
- Protection systems to guarantee your asset
- Ratios determined without having to do studies or reviews such as credit score or credit portfolio
- Transferable loan
- Tokenizable loan
- Additional court system protection
- Fair interest rates
Are You A WBTC Merchant?
Merchants are generally people who plan or intend to sell products or services in exchange for WBTC credit.
- Smart Credit offers a transferable credit system that destroys the liquidity problems that lender merchants experience.
- Credits can be used as a means of payment.
Are You A WBTC Passive Investor?
If you want to earn passive interest income on your WBTC, what you need to do is to benefit from Private Fixed Income Funds.
- The value of Smart Money Tokens that you will deposit in Private Fixed Income Funds has a guaranteed 1: 1 conversion rate with Ether.
- Smart Money Tokens have an interest-bearing feature. Therefore, they are extremely effective in generating passive income.
What Does WBTC Lending Process Look Like?
We have already said that you are not in control of the lending process performed by custodial platforms in the cryptocurrency world, but someone else – the administration. But when you want to realize WBTC lending with Smart Credit, you are in complete control. It is sufficient to follow the steps below for the three different lending products provided:
- Create an account on Smart Credit as a lender.
- To create a WBTC loan offer, share information about credit duration, minimum interest rate, and credit amount.
- In the peer-to-peer loan ecosystem, expect a borrower that creates a request that can match the rates you entered.
- The offers will match and the loan process will begin.
- While Smart Credit gives Ether to the borrower, it also gives you Smart Money Token at the WBTC loan rate you provide.
- The issued Smart Money Token is 1: 1 equivalent to Ether
- While the lender provides WBTC to the user, it can make payments or invest with its Smart Money Token.
- With the expiry of the loan, the lender’s Smart Money Token is destroyed, and instead, the user receives Ether.
WBTC Lending Process with Custodial Lending Platforms
Crypto lending is nothing new these days. However, 80 percent of the existing lending process takes place through custodial lending platforms. Custodial lending platforms provide access to users ‘private keys and gain interest by trading on users’ assests.
In short, on custodial platforms, lenders or investors do not have final control over their assets. This naturally makes the process insecure and violates the requirements of a decentralized financial economy.
WBTC Lending Process with Smart Credit
So what exactly does Smart Credit provide for the WBTC Lending process?
As Smart Credit, we define ourselves as a non-custodial DeFi product. Our credit approach and asset management tools, developed on the basis of a decentralized finance economy, ensure that only you have control over your own assets. Smart Credit cannot have any access to the private keys you use in credit processes or private income fund processes.
Of course, the only difference between the two different platform types is not related to private key access. In addition, we aim to eliminate the problems experienced in the current cryptocurrency lending processes from the following aspects as Smart Credit:
High collateral requirement
Borrowers want to have high borrowing capacity in their search for loans. But on custodial platforms, borrowers have a high collateral requirement. Smart Credit uses a number of algorithms and financial tool solutions to provide low collateral. In this way, the borrower can withdraw a much higher rate of credit under certain protection conditions.
Fair interest rates
The borrower wants to attract credit with fair interest rates. Too high interest will cause difficulties for the borrower in the payment process and restructuring of the entire loan process. As a non-custodial platform, Smart Credit offers fair interest rates by creating a regulated financial environment.
Earning Passive Income
Investors want to find a fund they can use when they want to earn passive income. It is impossible to find a fund that is completely under the control of the investor on custodial platforms. The private fixed income fund offered by Smart Credit offers safe investment areas where income can be obtained with fair interest rates.
Custodial lending platforms do not allow lenders to transfer loans. This leaves lenders with liquidity problems. In this way, injustice happened during income distribution turns into investment injustice. Blockchain technology, which will bring the redistribution of the world revenues with its decentralized system, is used in a most proper way in Smart Credit. Smart Credit makes transferable credit possible thanks to the Smart Money Tokens it provides to lenders during the loan duration process. In this way, the lender does not have liquidity problems.