Great news is coming in for all ETHLend enthusiasts: We are happy to announce, that we are going to undertake several changes regarding the reputation system and the token sale, which brings more positive effects to ETHLend users and token sale participants!
Reputation System (Credit Tokens)
Our Credit Token (CRE), which is a native token at ETHLend representing a DAPP-based reputation system, will be used solely on ETHLend’s platform representing the borrower’s reputation. Instead of using CRE for the token sale, we are introducing the profit sharing LEND token. Thereby, CRE only purpose is being a reputation building point system that enables unsecured lending and incentives responsible behaviour on the lending platform.
Credit Token (CRE) is minted on each repayment of the loan ONLY to the borrower. Each 1 ETH loan equals to 0.1 CRE. CRE cannot be sold or transferred to another address. CRE will solely represent the borrower’s reputation. It is used to access unsecured lending (once the function is live). 1 CRE allow to borrow up to 1 ETH loans without a collateral. Thereby, 0.1 CRE allows borrowing up to 0.1 CRE without a collateral. The idea is to create an unsecured (no collateral required) lending system on ETHLend on the basis of the reputation that the borrower has previously gained on secured loans. In case the borrower does not repay a loan, all borrower’s CRE is burned and lost forever. This raises the threshold to default.
LEND Token for fund raising
ETHLend issues 1 billion LEND tokens for sale and another 300 million tokens for the development fund. There will be no follow-up sales and no new LEND tokens minted. Each token holder is entitled to a profit sharing model on the fees that ETHLend collects and distributes monthly or quarterly to the token holders from January 2018 onwards. The profit sharing structure consist of base 5% profit and additional 1-5% profit on annual growth based on fees:
- First year (during 2018) = 5%
- 5% + additional 1% when fee revenue is 20% higher than in previous year
- 5% + additional 2% when fee revenue is 40% higher than in previous year
- 5% + additional 3% when fee revenue is 60% higher than in previous year
- 5% + additional 4% when fee revenue is 80% higher than in previous year
- 5% + additional 5% when fee revenue is 100% higher than in previous year
The aim of the profit share is to compensate early adopters and contributors on ETHLend. The profit share rewards early token holders since ETHLend is growing, early adopters might receive up to 10% on profit sharing. Once the decentralized lending market stabilizes, the profit sharing might relax to 5-6%.
LEND token holders are exempted from the borrower’s fee on ETHLend, when pledging LEND for a loan. This function aims to take into account that vast amount of token contributors that are ETHLend users. Fee exemption encourages to use LEND instead of other ERC-20 tokens as a collateral. This provides value to use for the token holders and the profit sharing provides value to hold. The idea is to deliver a strong token to the token market, and LEND by design and ETHLend behind it, would provide an ecosystem for growth.
24-month vesting model for founders and developers supports our aim to provide a valuable token. The pricing of LEND is updated to correspond the profit share and fee exemption benefits:
- First 1 000 000 priced at 7 000 LEND per 1 ETH
- 1 000 001 to 10 000 000 LEND priced at 6 000 LEND per 1 ETH
- 10 000 001 to 500 000 000 LEND priced at 5 000 LEND per 1 ETH
- 500 000 001 to 750 000 000 LEND priced at 4 000 LEND per 1 ETH
- 750 000 001 to 1 000 000 000 LEND priced at 3 000 LEND per 1 ETH
The token sale encourages early purchase of LEND. The token sale period is 30 days and the launch of the token sale will be announced soon. All unsold tokens are burned and no additional LEND is minted, ever.
For more information about ETHLend, read the full White Paper here.
Author: @ethlend @sergej.stein
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