Fintech, ICO

Meet the Founder – Exclusive Interview with ETHLend CEO Stani Kulechov

ETHLend Stani Kulechov Interview

EthLend is a decentralized lending service offering secured digital loans to customers in an intuitive and secure platform.

The main feature of ETHLend is the financing options available in ETH, which allows users to borrow or lend ETH using EthLend’s digital tokens in an efficient manner or by using ENS domains as a collateral.
With EthLend, people from around the world will finally have access to fair financing options through ETH as a lending tool.

We recently sat down with Stani Kulechov, the CEO of ETHLend to have a chat with him about the project as well as finding out his thoughts and insights.

Hi, Stani. Thanks for joining us today. Can you tell us more about yourself and ETHLend?

ethlend logoHello, Yeah sure, ETHLend is a Decentralized Lending Innovation using the Ethereum platform as its base. For over two years now I have been enthusiastically studying blockchain technology and the impact it will have on the financial ecosystem with the outcome being that the blockchain technology provides incredible benefits for lending, hence the introduction of ETHLend. The ETHLend platform has been operating since May with approx 40 loans at the moment either completed or nearing completion.

First off, why did you decide to use the blockchain in building ETHLend?
What was your thought process behind it?

Ok, Finance is where blockchain technology was conceived, and it is in finance that blockchain technology is arguably most transformative. It intrinsically offers greater visibility, scalability, and efficiency – and potentially at a lower cost. For borrowers and lenders who want to stay true to P2P’s disruptive origins, this has obvious value. I asked myself, “How much time is spent validating transactions, ensuring that counterparties are legitimate, and performing routine account administration tasks”?

The Blockchain answers these questions all in one. By providing a means of authorizing fully trackable and verifiable transactions, it also offers the potential for truly open-source many-to-many lending. Presented in these terms, it may well seem like a threat to peer-to-peer firms. If blockchain removes the need for marketplaces, why should borrowers and lenders pay fees to these platforms? ETHLend promotes less fees, transparency, and integrity amongst borrowing and lending.

Tell us about how you came up with the idea of ETHLend.
Did you face a problem within the lending industry or do you think there is a gap in the market for ETHLend to fill?

ETHLend was devised on the back of the banking bailouts in 2008. I have been thinking about that for some time now and the lack of transparency that goes on all the while, with the regulation still in place. Yet not much has been fixed over the past 10 years, the bailouts are still ongoing, people with their life savings losing trust in something yet have zero options besides banking institutions when it comes to borrowing and lending. Other p2p platforms end up just being extended arms of the banking system and the cycle starts all over again as the customers’ needs get left behind and distrust develops through lack of clarity.

ETHLend being decentralized has definitely filled this gap as we provide less fees, transparency, and integrity amongst the process, not to mention ensuring the entire process happens instantly. The process is simple and the customer can see it all unfold in front of them and can set the terms themselves. One of the worst things about applying for a loan is the waiting period and the unknown certainty of whether one is wasting their time or not.

What do you think is the biggest problem ETHLend will solve and why is the problem important to solve?

ETHLend will provide a platform to operate on that will enable the average person to have more options than what the bank alone offers when it comes to financial dealings. In today’s world, you are at the mercy of banking institutions for borrowing and lending. We all know the bank pays out minimal interest on investment accounts and charges maximum interest on borrowing. Well with ETHLend if you have for example your savings in cryptocurrency then you can offer that up to the lender under smart contract and receive interest paid back to you. At the same time borrow on the platform using tokenized assets as collateral without the excessive fees laid down by the banking institutions to set up the loan in the first place, People subconsciously turn to thinking that banks are the only option when it comes to borrowing or lending. We have partnered up with Bloom who provides credit scoring capabilities so both borrower and lender build a reputation amongst the ETHLend community which is usable elsewhere on the blockchain. This is an important problem to solve as it gives more freedom and choice to the user.

Why do you think the shift from traditional lending to P2P lending is happening right now?
In your opinion, is P2P lending the way to go in the future?

Definitely, the future of banking, much like Uber with cars and Airbnb with accommodation have forced their way in and boomed to that of a household name whilst disrupting the market for both transport and accommodation, we are making available a commodity we do not provide ourselves: in this case, Cryptocurrency. Instead of a bank intermediating between savers and borrowers, the two parties deal with each other directly. The platform does the credit-scoring and we make charge an arrangement fee for each loan request, (0.01 Ether Fee for a loan request, and 0.01 Ether Fee for funding a loan) and not from the spread between lending and deposit rates.

ethlend universe

The shift is happening right now and its mainly to do with the previous banking crisis and ongoing bailouts as I mentioned above and the need for change that is not being met by constantly renewed regulations. People want more freedom and choice. Market research tells us that there are countries at the moment which are paying from 0.5 to 5 percent. For example, here in Finland, it is quite common to have a secured mortgage loan with an interest of 0.4 to 0.8 percent on bank’s marginal. On the contrary, In Brazil, the interest rate tops to 32 percent and Russians pay on average of 11 percent and in India 10 percent (take note that today’s numbers may differ).

What does the difference mean? The differences in interest rate mean that with a higher interest rate, people and businesses have less access to finance. Fewer possibilities to buy houses, funds companies or even to pay for a wedding. The difference is in place because of the risk, inflation, and lack of foreign lenders. Moreover, these aforementioned factors are controlled by the banks and credit rating companies. In theory, we have an open loan market, but factually we don’t.
EthLend provides more democracy. Lenders from anywhere have the same access to finance. They are all treated equally. No discrimination, no review and more competition by lenders which results in globally lower interest rates. And with Ethereum, all loans are transferred within few seconds without the need of a bank account!

An interesting concept about ETHLend is the usage of ENS domains in how the platform works.
How did you come up with this idea and are there any advantages of using it over other types of collateral?

We came up with the idea through team brainstorming sessions and discussions on different unique collateral options available. The ENS domain collateral scenario is almost the same as the ERC-20 collateral scenario. The main difference is that instead of sending the collateral to the smart contract, the borrower changes his ENS domain owner address from the borrower’s to the loan smart contract. Therefore, when the borrower repays the loan, the ENS domain ownership is changed automatically by the smart contract back to the borrower’s address. On the other hand, on default, the lender can claim the ENS domain and auction it to regain any losses.
Pledging ENS domains might be a good opportunity for users that have to pay plenty of ETH for the domain and still wants to use some of the ETH that is locked in the ENS domain smart contract. Pledging ENS domains unleashes capital for other uses or for the use of purchasing more ENS domains.

Editors Pick: ETHLend ICO

Speaking of collateral, ETHLend is moving on ahead with a system that does not require ENS domains nor tokens are needed as collateral to secure loans.
How will this work and what happens in the case that a borrower does not repay his or her loans?

In order to allow lending on the blockchain without the need for fully collateralize funds, as known from conventional banking in the fiat world, we need to introduce a mechanism that creates a trust based on measurable variables, such as the payment behavior of the borrower. This, in fact, is challenging since on the Ethereum Blockchain environment we are working with pseudo-anonymous addresses and irreversible transactions.
Our primary goal is to stay loyal to our decentralized vision of finance, meaning that all possible solutions that come to our mind need to be “on-chain”.
Thereby, we have introduced reputation-based lending with our native ERC-20 compatible Credit Tokens (short: CRE) for non-collateralized loans. Every time the borrower repays the loans successfully, he will be rewarded with CRE. More precisely, on each 1 ETH loan repayment, there will be 0.1 CRE minted.

Each 0.1 CRE allows lending of 0.1 ETH collateral free. When the borrower does not repay one of his loans, CRE will be burned and the reputation is destroyed permanently. Furthermore, CRE has no monetary value and cannot be transferred. That way, we have a reputation that encourages responsible behavior.

Why would lenders choose to use ETHLend over other platforms currently in the market?
What are the benefits that ETHLend has that other platforms do not?

Well firstly… We have a functioning product since May this year. Where market research tells us our competition is working hard to produce a product so we have the advantage of user reputation adoption before the other platforms become live. We will be able to partner up exclusively due to the fact we are already live.

Secondly.. ETHLend enables cross-border lending where traditional lending platforms do not allow you to loan across borders.

ETHLend does not require a bank account. I have previously read that 2 billion adults in the world remain without a bank account. ETHLend’s advantage is that you don’t need a bank account to lend or borrow- Only an internet connection and some ETH. ETHLend is allowing the unbanked to lend and borrow. We are setting the standard of lending using ERC20 tokens as collateral with the competition having to ride in on our already existing wave.

ethlend global lending

What has been your happiest moment so far working on ETHLend?
On the flipside, what has been the most painful, or perhaps the most regretful decision you’ve made with ETHLend?

My happiest moment is definitely seeing the results of the pre ICO selling out in 77 hours to the tune of 2000 ETH. Of course, I was aware of the fear of whether we were going to get as much financial support from followers as we have forecasted to help grow ETHLend to its full potential. After the presale, I knew we are definitely on the right track and the support of the community is what drives me.

Sure ETHLend has had its challenges as well, like anything that’s being developed from conception, you learn from your mistakes and not to make them again. We haven’t made any major failings as such. The knowledge base from our strong advisory board is diverse and has helped out a lot. The team which I cannot thank enough is strongly committed and been working round the clock pretty much since May this year and is constantly researching and brainstorming ideas on a weekly basis no matter how absurd or disruptive they may be. We have so much to offer that we have not yet mentioned which will be announced as it unfolds within the New Year.

Is ETHLend already working with notable businesses or firms? Are there any future partnerships in the process?
If yes, can you explain briefly about it?

We are announcing partnerships daily at the moment. Having just today announced The ETHLend – BrickBlock partnership. Brickblock is interesting as it is a trading platform that connects real-world assets and cryptocurrencies with a mission to revolutionize asset trading. Built on the Ethereum blockchain, Brickblock allows holders of cryptocurrencies to invest in real estate and exchange-traded funds (ETFs) without requiring them to exchange their digital asset into fiat currency.

We have other partnerships:

Digix – which was one of the first proofs-of-concept on tokenizing valuable real-world assets where every DGX token contains the right to 1 gram of gold that is stored in an audited vault. Therefore, the value of the tokenized gold can be easily traded or pledged against a loan on the ETHLend platform without moving the physical gold repository. This digital gold standard provides more flexibility to investors that are trading in physical gold.

Bloom – Who bring federated identities, a decentralized historical payment registry, and credit scoring to the blockchain. For example, defaulted ETHLend loans will now be captured in the Bloom Network. This functionality would provide a real-life scenario for upholding the loan agreement and keeping on the repayment schedule. Reporting defaults will provide an incentive for the borrowers to repay loans and hence create more confidence for the ETHLend reputation based lending market.

Tell me more about the process of designing the LEND token.
Were there any moments along the way that caught you off guard or surprised you about the token creation process?

Luckily the process was easy due to the experienced developers we have on board and I myself am a developer in my spare time. We deployed the contract to the Github community which received a welcoming response, and then to the Test Net to see if it worked. I know people that have been caught out deploying a contract to the MainNet, pay for it, and then watch it fail. ETHLend implemented quality control processes to prevent any setbacks. We then designed the white paper structure around the Lend token, usability, and the platform. This is why we have had a working Dapp since may where other companies have whitepapers and advertising without a functioning platform. ETHLend prides itself on doing things differently and that is why we will succeed.

What do you think is the biggest challenge or obstacle ETHLend will face? How do you plan to tackle that challenge?

Due to the decentralization of the platform and our global goals that also include lending without collateral. We need to work country by country and jurisdiction by jurisdiction to implement and comply with all legal requirements that are needed to ensure the interest of both the lender and borrower.

That includes KYC, Processes on the defaulted loans, and the secondary loan market, however, our platform is very much needed and we see large international support globally so we are ready to overcome the challenges to develop a truly universal global conforming platform.

Moving on to more personal stuff, what does a typical day in your life look like?

Well lately, Since May I have been sleeping approximately 4 hours each night being so busy. I am lucky to have the most supportive wife in the whole world, who is helping out in so many ways and I am very appreciative of that.

Second to the continuing growth of ETHLend. I pride myself having built up a Telegram community of close to 8000 people as of today and still growing, having developed what I see as a personal relationship with the community where on a daily basis I am answering questions and relaying information about ETHLend, with full involvement on my part. I see other companies Telegram channels having employees running the platform. ETHLend is all about communal based transparency and I see this action to be one of the reasons ETHLend lead the way in decentralized lending. Democratizing the process in place of controlling it along with desensitizing the relationship is what often happens with banking institutions. Not with ETHLend. We are equal. You can join our Telegram group here: https://t.me/ETHLend

ethland rocket

Can you express one personal opinion of yours about the blockchain? It doesn’t matter if it’s negative or positive, we just want to hear your thoughts on it.

Blockchain is simply a tool for the empowerment of people, business, and government. It brings transparency, accountability, security, and automation to levels of which we have never seen before. It is the future.

Finally, what other personal goals (besides your career) do you have in life? Is there anything else in life you want to achieve?

I have a huge passion for sailing and I am concentrating outside of ETHLend on attaining my yacht masters qualification to back up my already competent sailing ability. I love the freedom of the ocean and the feeling you get just being at sea along with the awe that comes with the wind powering you along at speed, where you are solely responsible for your actions at the mercy of the wind and the ocean.

That concludes our Interview with Stani Kulechov

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