Crypto Lending Marketplace
The Tradeleaf Crypto Lending Marketplace utilises an entirely automated, decentralised, non-custodial blockchain protocol that grants crypto liquidity providers access to the trade finance market.
Using the Crypto Lending Marketplace, MSMEs will benefit from the fact that, compared to traditional bank lending, they are not subject to credit scoring assessments to borrow. Thus, the deal financing process is made easier for recipients.
On the other hand, crypto liquidity providers will benefit from additional revenue streams from various traders seeking deal financing on the Tradeleaf Platform.
Tradeleaf Crypto Lending Marketplace includes integrated modules crucial for the positive experience of lenders and borrowers.
To obtain crypto financing for the deal, the borrower (trader) should select the Crypto Lending option when submitting the offer on the Deal Marketplace.
Tradeleaf Crypto Lending Marketplace is a pooled crypto lending solution. Instead of bilateral peer-to-peer lending, it involves pools of lenders acting as liquidity providers of crypto assets, with no need for each borrower to match specific lenders. Therefore, when the borrower accepts the Crypto Lending option, it triggers pool opening, meaning both lending and staking pools will be opened for a particular deal.
The crypto liquidity provider will now be able to lock TLF tokens and other crypto assets in the lending pool related to the deal. As soon as the pool cap (amount of funds requested by the borrower) fills, the crypto assets unlock for the borrower.
There is a difference between locking TLF tokens and locking other crypto assets in lending pools. The lending pool APY equals the interest that the borrower should cover. However, if a crypto liquidity provider lends a TLF token, the APY will be higher because TLF token staking rewards are added to the stake, increasing the total APY.
To cover counterparty credit risk, the borrower should also store stablecoin collateral, which is retrieved after the loan repayment and interest. The collateral value uses trustworthy stablecoins due to the unpredictable volatility of non-stablecoins crypto assets.
When the borrower repays the loan along with interest, both lending and TLF staking pools are liquidated, and stablecoin collateral can be retrieved.