Interview with founder of LendChain – Oscar: Establishing a Digital Asset Bank with Financial Technology

Oscar started to work in Bitcoin area in 2013. Apart from speculation, he had invested in several crypto currency projects with his friends in the past few years. Although most of projects had failed, he believed in Blockchain and its underlying technology.

In 2016, Oscar resigned from previous company and found the credit data-trading platform – GXChain, and served as CMO.  GXChain was target to serve for FinTech institution like Pingan、 CreitEase and CITIC etc., but as a start-up company, it is often difficult to get in touch with the risk control department of such a big company.

At this point, Leo Co, an A-share listed company, invited Oscar to join and serve in their financial department. After consulted with his team, Oscar decided to accept the offer and run GXChain’s business still concurrently. This way, through A-share company background, Oscar can get in touch with top Fintech institution and introduce high quality customers to GXChain.

During the operation of GXChain, team members had discussed about the possibility of connection between blockchain and financial industry quite often, and they decided to start from digital currency mortgages.

Thorough research, Oscar and his team found out the existence of market’s demand for digital currency mortgage loans but with periodicity.

Oscar said to,“EthLend and Saltlending are two typical projects that focus on this problem, one is using digital currency to loan currency; the other is a P2P mortgage loan based on ERC20 contract. However, the team think both of these projects had business bottleneck, and there might be policy risks.”

Research shows that the demand for money-based currency management is still a potential demand to be developed, and the market demand is large. “Whether in a bull market or a bear market,” Oscar added, “As more and more funds and talents flow into this field, coupled with the rapid development of blockchain, companies in this industry will also have financing needs. Unlike traditional finance, what they need is based on tokens. We believe that this is an area that needs to be opened up.”

There are several pain points for blockchain companies. Let me cite a few examples.

Institution that focusing on the token investment, under the current bear market environment, the already sold tokens will not be sold back, but good projects will continue to invest. At this time, tokens circulated on mainstream exchanges can be mortgaged to LendChain and used by ETH.BTC as turnover.

The other example is project party who has mortgaged ETH at the current price of 2900 RMB, borrowed USDT for 6 months at an annual interest rate of 20% to cover six months’ wages and expenses. After 6 months, ETH prices have risen several times, and the original 20% USDT interest has been drizzle.

The ETH raised by the project party can lend a part of the wallet to LendChain and earn more ETH.

In addition, experienced several years of ups and downs, Oscar is more aware of the current stage of the market, and a digital asset-based asset management service platform is very necessary. Allow professional investors to help ordinary users manage assets and achieve more robust gains.

Considered all of above situations, Oscar left the company in 2017 and re-established the team to create LendChain. The company’s operating body is set in Virgin Islands.

Oscar told that the capital needs of cryptocurrency holders fall into two broad categories: financing and investment. On the financing side, investment institutions and individual investors need to mortgage minority tokens they have, borrow mainstream currencies, and continue to invest; on the investment side, ordinary currency holders lack good investment channels and can only put tokens in their wallets. LendChain can provide them with fixed income and floating income financial products.

“I think we are more like a digital asset bank than a digital asset financial platform.” Oscar’s definition of Lend Chain.

Oscar shared more examples to further explain:

Token focused investment institutions will not sell back their listed and circulated token at a low price under current bear market. However, once they meet quality projects, at this time, they can mortgage token circulating in mainstream exchanges on LendChain and borrow ETH, BTC for turnover.

To pay for 6 months’ salary and multiple expenses, projects mortgage raised ETH as current 2,900 yuan price and borrow USDT for six months at 20% annual interest rate. Six months later, ETH prices have quadrupled and 20% of USDT interest is not a big deal any more.

Idle ETH can also be lent on LendChain for more revenue.

According to Oscar, unlike Libra and other competing projects aimed at solving problems in the traditional financial industry using blockchain technology, LendChain hopes to solve the problems of the digital currency industry by means of financial technology.

“In Lend Chain, blockchain is not a means but a problem to be solved.”

The advantage of blockchain is that it can transparently record every transaction and transfer, but the disadvantage is that the infrastructure cost of the blockchain industry is still not perfect, resulting in high transaction costs. Therefore, LendChain adopts a centralized operation plan at the current stage to reduce the cost of internal fund transfer and to ensure the maximum possible user benefits.

In terms of risk control, LendChain’s core approach is to combine full mortgage with ex ante best practices. For hard-to-find individual investors, LendChain will require users to provide digital currency collateral equivalent to twice the value to protect investor’s rights. For organizations, LendChain personally develops mortgage rates by investigating the reputation and strength of institutions.

Speaking of cooperation with GXChain, Oscar stated that because he is one of the founding members of GXCHain, he knows the technical strength and team values of GXChain very well and believes that they are trustworthy partners.

On the other hand, based on the DES data exchange platform and nearly two million users of Blockcity, GXChain has a large credit data base and traffic, which can provide LendChain with a large number of early adopters. At the same time, in the middle period of development, the user can be authorized to save credit data on GXChain, and to provide wind-control model basis for credit loans in advance.

In addition, LendChain will also work closely with GXChain on the issue of real-name authentication data.

“GXChain has a wealth of practical experience in data privacy and relying on the support of KPX, LendChain will ensure the privacy and security of user data to the greatest extent possible.” Oscar said: “So we chose GXChain as our The partner is also the second shareholder of LendChain. This is a win-win cooperation and LendChain can deeply integrate and cooperate with GXChain.

It is reported that LendChain has officially opened the public beta on June 19, and has already launched online mortgage and wealth management products. It was officially launched on June 28 and is fully open to nearly two million Blockcity users, and will be launched in the near future.

At the end of the interview, Oscar said to “At present, the world’s laws related to cryptocurrency have yet to be completed, We believe that mature and mature laws and policies will be introduced soon. We are ready for compliance and will be ready at any time to embracing supervision.”

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Company Name: Hangzhou LendChain Technology Ltd.
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