P2P Lending

What is P2P Lending?

Peer-to-peer lending eliminates the middleman typically present in conventional banking systems and enables borrowers and lenders to communicate directly. Typically referred to as "Investors" in a P2P lending scenario, lenders lend money to qualifying candidates. The parameters of the lending arrangement are often determined by an intermediary website (P2P platform), and the transaction is facilitated once both parties have agreed to the conditions.

Blockchain technology allows for direct communication between lenders and borrowers, eliminating the need for an intermediary. With the aid of this technology, smart contracts are automatically carried out following the loan terms, enabling completely trustworthy interactions between the two parties.

Loans made on the blockchain still need collateral, which is often deposited in either fiat money or digital money. The collateral is typically kept in a smart contract that adheres to the conditions of the deal on an intermediary website or cryptocurrency P2P platform.