How Constant Is Pioneering The Exploration Of A New Fintech Generation 

How Constant is Pioneering the Exploration of a New Fintech Generation 

Constant, a leading secured P2P lending platform, has been expanding its service and product offerings in recent months as it continues to originate more loans on its Ethereum-based lending service. With over $3 million loans originated in under 4 months, the platform is continuing its success by diving into emerging markets, particularly cryptocurrencies. 

Recently, the startup unveiled its crypto staking-service-as-a-service (SaaS) part of its broader initiative to penetrate into crypto products, even partnering with HC Capital, one of Vietnam’s largest trading communities, to leverage crypto assets in different ways. Comprising roughly $70 million in monthly volume, HC Capital’s users will receive exclusive deals and trading opportunities from the relationship with Constant. 

“If that’s got your trader senses tingling, you’ll find Constant and HC Capital offering margin trading, portfolio diversification, and other ways to leverage cryptographic assets without selling them first,” details the announcement on Constant’s blog. “In other words, it’s a promising platform for better investments.” 

The moves are in line with Constant’s refreshing take on P2P lending, which itself was a revolution in the credit industry. 

With a slew of developments from SaaS to supplying Compound Finance with liquidity, Constant is pioneering the way towards a new generation of fintech platforms. 

Fintech Evolution & Constant’s Growth   

Fintech evolved into a full-blown movement in the late 2000s following the success of PayPal and the launch of platforms like Square, Stripe, Betterment, and SoFi. In particular, P2P lending platforms like LendingClub targeted specific slices of the credit industry’s value chain by removing the intermediary in the loan process — directly connecting borrowers and lenders. 

With competitive rates and loan optionality to users, these platforms proved especially popular among young people and fueled a rapidly growing $43 billion industry

But fintech progress doesn’t slow down, and open banking solutions like Intuit and Finicity soon integrated 3rd party developers into banking infrastructure to improve user experiences, payment applications, and loan processes. Fast forward to today, and tech companies like Apple are constructing native payment tools, Google is reportedly set to open checking accounts, and Facebook is fighting regulatory backlash against its Libra stablecoin. 

Amid the high-profile banking and tech company developments is another revolution in the credit industry, however. Alongside the emergence of markets and instruments for crypto assets, the open-source and trust-minimized nature of public blockchains created an opportunity for platforms like Constant to wield a new type of P2P lending model. 

Early P2P lending models have undoubtedly been a huge success story, but they come with some critical trade-offs. For example, significant risk is offloaded to lenders if a borrower defaults, and third-party trust in intermediaries for borrower collateral presents another concern on the opposite side of a loan contract. 

By leveraging the strengths of public blockchain networks like Ethereum, Constant can circumvent these endemic issues in P2P lending models. Ethereum relies on smart contracts, autonomous computer programs that execute upon certain call conditions to perform specific tasks. In the context of Constant, those smart contracts function as the escrow system for a loan contract. 

Borrowers deposit collateral from a suite of crypto-asset options, selecting preferred interest rates and the amount to borrowed — with a minimum of 66 percent LTV. The deposited assets, in the case of ETH, are stored on an independent Ethereum smart contract, which will release the collateral upon repayment of the loan. These contracts are not subject to outside influence, only the terms of the agreement. 

All other crypto collateral is stored in either password-protected web wallets on a dedicated server or in cold storage, such as hardware wallets. 

And Constant also enables customizable loan terms and interest rates for lenders. 

For example, lenders choose how much in fiat currencies or stablecoins to deposit on the platform using Constant Flex or its Custom option, and pick the interest and length of terms. Constant matches borrowers and lenders directly, which enables better rates for both sides of a loan contract by removing the intermediary. 

However, the onset of crypto-based loan products also is critical to the appealing returns offered by platforms like Constant. And those high-yield returns are marking the beginning of a new narrative in open finance. 

Crypto Lending & Staking-as-a-Service (SaaS) 

Crypto exchanges have rapidly been expanding the types of services and products they offer to their customers. As closed value ecosystems, products like futures, margin trading, derivatives, exchange tokens, and stablecoins are designed to attract users and keep them in their ecosystem. 

Eventually, by rolling out additional financial products, they can extract value from their communities the way a bank does. 

For example, Coinbase now offers SaaS (most recently Tezos staking) to all users, and Binance is blitzscaling into a business model that is entering high margin markets like banks, which are short-term borrowers and long-term lenders. The key to starting this trend has been SaaS, where users simply hold crypto assets on the exchange and earn interest at rates much higher than conventional bank accounts. 

And Constant is now presenting SaaS to its users on TomoChain — with yields up to 6 percent APR for staking TOMO tokens. 

Exchanges generally can’t compete with this type of model since they are not P2P lending protocols built on a permissionless network. Constant users can subsequently withdraw their stake at any time, interest is accrued every 30 minutes, and Constant handles the complex back-end process of actually staking. 

By fusing SaaS with a P2P lending dynamic, Constant not only preserves the benefits for removing an intermediary in the loan process but capitalizes on the high-yields of staking crypto-assets. Combined, the rates offered by Constant can outpace most conventional assets like bonds, treasury bills, or index funds without considerable counterparty risk. 

Constant plans on expanding the scope of cryptocurrencies that can be staked on the platform, but for now, the minimum requirement is only 10 TOMO tokens.

Open financial platforms, specifically P2P lending, lower the barrier to financial services, and increase competition for liquidity — both sizeable benefits for borrowers and lenders. Constant’s foray into crypto lending, SaaS, and customizable loan terms are representative of the ongoing disruption in finance that appears unstoppable at the moment. 

And when it comes to pioneering a new generation of fintech platforms, Constant provides a measuring stick for the industry’s progress. 





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