OKEx P2P loans have been launched to target the growing Decentralized Finance market. Lennix Lai, Financial Markets Director, says that the new Peer-to-Peer loans will set new standards for transparent and open lending as per market demand and supply.
As OKEx forays into the DeFi, it has to understand that the market is going through a turmoil. The headwinds in the crypto market amidst the global virus pandemic has to be tackled strategically. The C2C loans feature a far cry from the earlier ICO boom that saw exchanges struggle to list the most popular token. It will be interesting to see how the DeFi community receives the OKEx P2P loans.
Crypto exchanges seem to be eager to join the DeFi bandwagon. Besides the DeFi terrain, crypto exchanges are also competing with each other for IEOs and cloud solutions. The OKEx P2P loans will undoubtedly help it tap into the burgeoning C2C loan marketplace.
C2C LOAN: #HODL-ing too much $BTC, needing some $USDT but don't want to sell your #Bitcoin just yet? We've just rolled out a new loan service, where various loan & investment demands of users can be met – pledge BTC or invest USDT!
— OKX (@okx) March 19, 2020
Lai further adds that the C2C community loans are an ideal match between demand and supply. Market competition determines the interest rate, which brings transparency to the lending process. There’s no arbitrary interest rate-setting from any third party here. As per the official blog, the OKEx P2P loans will offer direct transactions between users and help them meet the user’s investment demands.
Users can access the latest loans feature by updating the official app and then explore ‘C2C Loan’ on the app’s homepage. BTC is the mandatory collateral asset required for borrowing money. Loans are disbursed in USDT. More assets will be added in the future. OKEx Perpetual swaps are a good example to follow for scaling.
How are OKEx P2P loans different from other lenders
P2P loans are not perfect. They do come with some downsides. Loan defaults are pretty standard in DeFi as many times; borrowers are unable to pay the debt on time. OKEx resolves this concern by using a pre-warning mechanism. In case the crashing collateral price violates a pre-determined point, the borrower will receive a warning message that will apprise them of the situation. At this point, they have to increase their collateral. In case they don’t, the platform will simply close their respective position as it touches the pre-determined risk line.
OKEx P2P loans will undoubtedly be a highlight of the exchange’s wide-ranging services. Not only will it help tap into the growing DeFi market, but it will also introduce its current users to a whole new set of services.