Lending & Blockchain
One popular, trending topic at present is DeFi or Decentralized Finance. It is one of the major use cases in Blockchain now. With the trend around DeFi, there are various ways one could grow their crypto portfolio. One of it is through lending.
It is a known fact that one would take a loan when there is a short of cash. There are banks and various other lending companies that people will look out for to fulfil their need. Of course, they have to repay back with some interest. This interest is where the banks or lending companies or even licenced money lenders are making money.
Just imagine you are at the receiving end of the interest. So, in crypto you can actually loan out like the banks and receive some interests out of it. But it would be slightly different from traditional lending. Basically, it’s just an alternative investment form. The lender, receives interest from the borrower in exchange for the loan. The borrower, is supposed to have deposited crypto-assets as collateral (note this word) to secure the investor’s investment and borrow probably half of the value that he or she has deposited. Hence, the lender can be sure that if something goes wrong, that ‘collateral’ will be used to compensate him or her. Easy to understand right?
Land & Lending
Now, we are not looking at this type of lending here. Let’s move out a bit into real world rather than crypto or blockchain. Let’s look at land and its development (property/ real estate). When there is a bare land, depending on the type and location, it generally carries certain value. If you want to increase its value further, you might transform it by planting fruit trees and turning it into a fruit farm. Alternatively, you might build some houses and develop it into a housing estate. All these depends on the legal rights and jurisdiction of the respective land area. Property developers would engage in real estate development. They buy land and either create or renovate the property, risking their resources and capital in the hopes of investment reward.
Borrowing money for development, if you’re an established property developer is relatively easy, but the crash rate for property developers is high and many small-time property developers soon get in over their heads. Consequently, borrowing money for their development can be difficult.
The real estate sector has been negatively affected recently by pandemic-related (Covid-19) shut downs and market volatility. Major changes in key living trends had negatively affected the entire demand and supply chain in the real estate sector.
Financing has been tight in the real estate market due to lack of liquidity, thus, casting doubts on the future of real estate prices. Such impact also adversely affected the development/redevelopment market where capital funding is diminishing rapidly i.e., the banks and financial institutions are not willing to give out loans to these developers even if they have collateral. This has mainly affected the small-scale developers.
Real estate developers and/or property owners affected by the lack of mainstream financing affecting the sector i.e., not getting funds or capital for their development projects, are looking into alternative financing opportunities.
LandOrc & Lending
Earlier we looked at lending to borrowers. Then, the developers (at global level) who are looking for alternative financing. LandOrc Financing or LorcFinancing can be their solution. A real estate developer needs funding for his project. He has got a land to use as collateral. They can approach LorcFinancing, collateralise the land, for a relatively lower borrowing rate and start working on their projects. LorcFinancing, offers an opportunity to raise liquidity through the crypto ecosystem and lend it to the developers by holding their collateral. As we saw in the crypto lending, here the developers will be lent around 50% of their collateral value.
How do you become a lender in this unique method that no one has ventured? You buy LORC tokens by LandOrc and stake them for a specified period of time, for fixed returns through their smart contract. Easy right? This is the basic idea how you would earn from LandOrc’s lending platform.
In the event of failure of fulfilment to payback by the developers, their collateral will be sold to fund back the platform. No matter what would the scenario be, based on the smart contract, your returns are GUARANTEED! As LandOrc grows bigger, you can imagine the number of land or property collaterals that they could potentially hold at their disposal.
We are looking at a very unique way of lending by LandOrc.io that combines both on-chain and off-chain methods through blockchain technology. Detailed process has not been covered here so that you could just get the basic understanding of how LandOrc.io lending platform works for crypto lenders, in this case through staking your LORC tokens. Tempting right? They are having their private sale now with 3 months vesting. You can buy your LORC tokens through https://landorc.io/private-sale.html
Sources:
https://landorc.io/private-sale.html
https://www.ledger.com/academy/what-is-crypto-lending
https://smallbusiness.chron.com/borrow-money-become-property-developer
