Litecoin Foundation teams up with crypto lender Cred for loans service
The Litecoin Foundation at this time introduced a “strategic partnership” with Cred, a licensed San Francisco-based crypto lending and borrowing firm that has over $300 million in lending capital. As of at this time, Cred is built-in into the Litecoin app, and it guarantees up to 10 p.c per yr in curiosity for any funds staked.
Funds might be withdrawn at any level, and curiosity is paid month-to-month, Dan Schatt, co-founder and president of Cred, advised Decrypt. The 10 p.c determine is predicated on the unique quantity staked: Pledge $100 of Litecoin, and even when the worth of that sum rises to $1,000 in six months, you’ll nonetheless get $10 value of curiosity. The reverse can be true: ought to Litecoin drop to zilch, you’ll nonetheless get your $10.
Both companies stand to earn money on the deal. Cred makes cash by loaning out Litecoin at an excellent increased rate of interest, and pockets the distinction, minus a lower it provides to the Litecoin Foundation.
Schatt mentioned that his firm has constructed the system and dealt with all of the fantastic particulars, together with authorized compliance, regulatory assist, and operational and buyer service assist. “But really, this is Litecoin’s application, and the proceeds of the application are used to support the Litecoin Foundation,” he mentioned. The cash that the Litecoin Foundation makes from the service shall be spent on issues like growth and training.
Schatt thinks that there’s value in constructing its product immediately into the Litecoin Foundation’s pockets. He’s previously of PayPal, an organization that made its fortune serving to different firms combine funds plugins into their providers. That’s all of the extra essential in a nascent business like crypto, the place firms typically aren’t expert at constructing their very own lending and borrowing purposes, lacking out on a possible stream of income, mentioned Schatt.
While Schatt doesn’t view Litecoin as a retailer of worth similar to Bitcoin, he mentioned he sees value within the coin for its transactions. Litecoin is, properly, “lighter,” mentioned Schatt, and it’s “leverageable for a lot of transaction-oriented services.”
And Schatt believes Charlie Lee, the creator of Litecoin, shares the identical imaginative and prescient for Litecoin: He “sees the value of building a technology that we think will ultimately take over […] some of the core transaction capabilities that legacy financial rails dominate today,” he mentioned.
Schatt, nonetheless, isn’t “betting on any one cryptocurrency.” Instead, he’s hoping that his merchandise can enhance all the business. ”Traditional banks should not supporting crypto firms,” he mentioned. Cred’s collateral brokers and custody companions embody Ledger, Xap, Bittrex and BitGo. It additionally has partnerships with Bitcoin.com, Bitbuy, and Uphold. Last Monday, it launched CredEarn, an identical service, on Uphold.