BlockFi Lending LLC is a "secured non-bank lending institution" that specializes in providing cryptocurrency-backed US dollar loans to digital asset investors. Zac Prince, founder and CEO of the company, said in an interview that "we are moving from an encrypted bear market to an uncertain market." He believes that the stable currency will be bigger than BTC sometime in the next five years. Market value, and the large-scale adoption of stable currency is also good for BT C.
Image source: ETHEX
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Encrypted lending vs traditional lending
When talking about the development of encryption lending and its difference from traditional lending, Prince said:
“ Debt and credit are a key part of the financial infrastructure in traditional markets. We believe that the encryption market is also the same. I think there will be similarities between the P2P lending sector and the encryption field, but I think crypto lending has the ability to change the rules of the lending market. And have a broader market than P2P lending."
“The encryption lending industry will quickly shift to being dominated by institutional capital providers. Now, companies like Goldman have created a challenging competitive environment for some online lenders through their Marcus platform. I think encryption lending will experience similar developments, Some of the key business strategies that can help companies expand in online lending will also apply to the crypto debt/credit market."
Key business strategies to help companies scale up
According to Prince, the core business strategy to help financial service providers expand their business includes having strong institutional connectivity and funding sources , a constant focus on customer experience (UX) , and an excellent platform that delivers a range of products that enable customers and companies. The relationship is sticky .
It's worth noting that BlockFi recently started offering 6.2% of cryptocurrency deposit interest and successfully attracted $25 million in encrypted deposits in just two weeks. However, BlockFi's Terms of Service state that the company can change the amount of interest it pays to customers. Prince explained that this is necessary because BlockFi is not yet a mature company and the company recently cut interest rates on large deposits (500 + ETH or 25 + BTC ).
Then, when interest rates change, how to balance the sustainability of the company's business with customer complaints and dissatisfaction? Prince said:
“This will be a process of constant change and adjustment. The key variables are market conditions, BlockFi's customer acquisition goals, capital availability and competitive environment. Fortunately, after the first change we did not see a large outflow of deposits, our customers. Quantity and deposits continue to grow rapidly."
In answering questions about the best use cases for blockchain technology, Prince pointed out:
“Distributed ledger technology enables us to implement built-in auditability and 24/7 system reliability. I think the most powerful factor is creating a digital asset that can compete with legal currency for market share; and blockchain assets Globally accessible."
Stabilizing coins may have a larger market value than Bitcoin
When asked about the potential of the stable currency, Prince said:
"I think stable currency is a reputable 'dollar cryptocurrency', and they will have a larger market value than BTC sometime in the next five years. I think the large-scale adoption of stable currency is good for BTC. I also believe that opaque stable coins will be lost in the market to reputable/US dollar-backed stable currencies."
According to Prince, securities token issuance (STO) would be practical because "the traditional securities market is large, but it is strictly limited by geographic location, and it lacks effective global retail distribution. I think the biggest STO will be The biggest securities issue is the same. As an American consumer, it is difficult for me to understand the ideas behind some of the early STOs, because the products they provide are usually what I can get from a traditional financial market as a qualified investor."
“So, I don’t know what the value of tokenization is. If you can 1. Donate each unique asset or 2. Use tokens to provide publishers with a better distribution plan to facilitate buyers’ purchases, Then I will think that you have a strong value proposition."