Challenges with Existing Loan Platforms

The current crypto lending landscape remains fraught with inefficiencies that limit user potential. The major challenges include:

• Limited LTV Ratios: Many platforms cap loan-to-value (LTV) ratios at restrictive levels, preventing users from fully leveraging their crypto assets.

• High Liquidation Risk: Borrowers are often exposed to significant liquidation risks, especially in volatile markets, which can be detrimental to those new to crypto lending.

• Tax Complications: The process of converting cryptocurrency into fiat currency frequently triggers taxable events, reducing net liquidity and complicating financial planning.

• Insufficient Liquidity Rewards: Existing platforms typically offer minimal incentives for liquidity providers and rarely share revenue streams with their users.

• Rigid Credit Card Spending: Crypto credit card options usually require selling assets to fund transactions, leading to the forfeiture of potential asset gains and additional tax liabilities.

• Limited Loan Duration: Most platforms enforce strict loan duration limits, making it difficult for users to maintain loans indefinitely. Additionally, borrowers are at risk of forced liquidation if market conditions deteriorate.