Amid a year of significant growth for the decentralized finance space within the crypto industry, Hong Kong-based crypto exchange Bitfinex has unveiled its new lending service today, called Bitfinex Borrow.
"Bitfinex Borrow is a borrowing platform," Bitfinex chief technology officer Paolo Ardoino told Cointelegraph.
Bitfinex Borrow acts as a way for Bitfinex to offer loans to customers.
When customers put up crypto assets as collateral in exchange for a loan, Bitfinex then allocates those assets to a different customer as part of a separate product called Bitfinex Funding - hence the peer-to-peer classification.
"Bitfinex Funding, Lending Pro and Bitfinex Borrow are all part of the same, peer-to-peer lending markets. These are different products, using the underlying same pool of funding," Ardoino said.
Customers can receive U.S. dollars or dollar-pegged stablecoin Tether in return for their crypto assets, which Bitfinex holds until the loan is paid back, per Bitfinex's announcement.
Bitfinex Borrow seems more similar to the DeFi loan structure seen prior to the recent bubble than a continuation of the parabolic trend.
The service comes with a fairly wide range of annual interest rates, between 5.5% and a steep 18.25%, pending a number of factors such as the length and size of each loan, Bitfinex's statement noted.
Customers with partial verification status on Bitfinex must keep their borrowed assets on the exchange, but those with top-tier verification can withdraw such funds, the statement said.
Bitfinex Borrow lets customers pay back their loans all at once or in segments.
Bitfinex to compete with DeFi with new borrowing service
Udgivet den Nov 11, 2020
by Cointele | Udgivet den Coinage
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