Crypto lending is an alternative investment strategy that allows investors to lend cryptocurrency to borrowers in exchange for interest. This system has 2 parties - the lender and the borrower.
Taking a loan requires collateral. The lender receives interest from the borrower in exchange for the loan, while borrowers’ crypto assets are counted as collateral to secure investors’ investment. This serves as a guarantee for the lender; if anything goes wrong, the collateral is used as a form of compensation.
Cryptocurrency lending mode of operation is similar to peer-topeer lending. Lenders and borrowers get to connect via the Acta Finance platform. However, instead of fiat currency, Acta Finance lending transactions use cryptocurrencies.
Lenders allocate their crypto assets at custom rates. Generally, users often lend their crypto assets for two primary reasons: margin lending and personal use. Once a lender’s fund is available, the borrower - who has concluded that a particular coin’s price will appreciate - will ask to borrow a part of the funds available at that moment. The borrower will then repay the borrowed cryptocurrency with the assigned interest rate.
This illustration is an example. The product and platform will have a different design and UI/UX.
Acta Finance provides, as the first platform in the crypto industry, peer-to-peer lending by smart contract. By placing loan ask orders on Acta Finance, users are able to customise their requested daily interest rates (up to 2% daily) and can determine the maximum duration of the contract. There are 3 duration options available: 7, 14 or 28 days.
Upon taking a loan, there will be an initial 30min accrued interest calculated. Borrowers are allowed to pay back the loan whenever it suits them, within the provided time frame, to pay as little interest as possible.
Users can enable auto lending which auto-fills in the reserved amount of the asset to the address, a minimum daily lending ratio (%) and a preferred lending duration. Acta Finance will then automatically place the best possible ratio at the lending duration, on behalf of the user.
I have 1000 USDT on my address and enable auto lending. I fill in the form:
- reserved amount of USDT to my address, which won’t be lent = 10 USDT
- duration: 7 days
- Lending ratio: in % / day. For this example let's put it at 1%
If the current lending ratio is higher than your minimum, the system will automatically place your 990 USDT at 1 unit lower than the current available loan offer. If it is higher, then your absolute minimum daily interest ratio will be placed.
Acta Finance brings a unique lending mechanism that protects lenders from losing any funds during liquidations.
An insurance fund, by smart contract, is created that receives 5% of all the realised lending profits. The smart contract only gets addressed upon liquidation events so the lender is guaranteed to receive the lent asset + interest up to the moment of liquidation.
The lender can choose to receive the loan interest in ACTA Tokens. This not only guarantees, upon liquidation of the borrower, that the accrued interests are paid completely but also gives an additional 1% bonus, paid by Acta Finance, on the realised profits of the loan.
15% of the lender’s realised profits go to the Acta Finance platform and get distributed as follows:
*The allocation of the affiliate levels that are not filled get allocated automatically to the insurance fund.