Global technology-focused investment firm, Nonagon Technologies is targeting to launch its crypto loan platform, LOANX, in 2019. The release of the platform irrevocably alters the cryptocurrency liquidity landscape by allowing institutions and businesses to access instant cash, while retaining ownership of their digital currency holdings. Nonagon Technologies’ innovation marks an important milestone for the cryptocurrency space, as the platform has the potential to free up hundreds of billions of dollars of liquidity.
It only takes a brief look at the cryptocurrency market capitalization charts over the course of the past year to see that the majority of these currencies — Bitcoin, Ethereum, Litecoin, Ripple and other major cryptocurrencies — show significant growth in value and are expected to see significant growth in the future, reflecting both a loss of faith in traditional money systems and a growing confidence in the power of blockchain technology. However, these cryptocurrencies are not proving to be very effective as payment instruments; their growth in value has caused them to behave more like assets than currency, so investors and miners are holding cryptocurrencies rather than using them to purchase goods and services. Users have no incentive to trade or sell them, since once they are traded, owners lose their investment position.
This is something that the team at LOANX are about to change. Their solution is a credit model in which volatile crypto-assets act as collateral while credit is granted in a stable currency. This system allows borrowers to gain profits from their assets as the market rises, while reducing risk to credit providers and borrowers if the market falls, hence, filling one of the cryptocurrency markets and the blockchain industry’s biggest voids.
Paul Martin, Founder and Chief Executive Officer of Nonagon Technologies, said: “As crypto assets continue to grow in size and scale, so has the ecosystem of financial services to support them. LOANX aims to create a stable lending model using cryptocurrencies as a security deposit. Our model will facilitate access to credit while building a new credit market – loans backed by crypto collateral, based on the security and transparency of blockchain technology.”
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