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There’s a quiet financial revolution taking place and most of the finance world remains oblivious to it. Essentially, we’re witnessing the building of a parallel financial system as the legacy system crumbles under the pressures of inflation. Decentralized finance (defi) has emerged at the perfect time to save humanity from the decades of poor monetary decisions made by the large banks. Many defi projects are hard at work building a more efficient, equitable, and accessible financial ecosystem. In this spirit, Cobalt Lend is pioneering a unique model to broaden access to capital.
Cobalt Lend aims to democratize finance by allowing their community to vote on credit proposals. Anytime a request to borrow is made, the community will decide on whether it gets approved, without the oversight of a bank. This means the community will take an active role in the process and get compensated through fees generated by the loan.
Cobalt Lend will be targeting small businesses with its product. According the Small Business Administration, there are 30.7 million small businesses in the U.S. which account for 99.9 percent of all U.S. businesses. Additionally, they create over 2/3 of the jobs in the U.S. economy. Needless to say, small businesses are a vital component of any economy. Despite their importance it’s not always easy for them to secure a loan. In the U.S. 25% of borrowers get approved for loans from large banks and 50% get approved by small banks. The number one reason these loans get denied is due to poor or no credit history.
By offering a nuanced framework for loan approval, Cobalt Lend hopes to expand access to credit. In comparison to the legacy banking system, Cobalt Lend will rely on a project’s quality and collateral in determining their loan eligibility. In legacy finance the rigid requirements are a constraint on the broader economy. By opening up opportunities to more small businesses, they’ll get liquidity to grow and expand their businesses. This means more jobs and prosperity for the general population.
Additionally, Cobalt’s ecosystem will include community members who will vote on loan proposals. Instead of corporate suits deciding the fate of borrowers, community members of the ecosystem will determine who gets approved. They will be provided with relevant financial and business data to help guide their decisions. This ensures the respective project gets funding based on its merits rather than race, color, or background. This serves to further increase capital accessibility.
To bring this vital service to the masses, Cobalt has been hard at work since their launch in Q1 of 2020. They began their journey by partnering with a major blockchain developer who provides point of sale (POS) terminals all over Asia. This would enable small businesses to accept crypto at their sales terminals. Next, they shifted their focus to integrating three DEX’s (Decentralized Exchange) into their mobile app. One of these DEX’s was their own proprietary DEX designed to provide immediate liquidity for trading assets.
To provide less friction during the voting process the development team is setting up push notifications. Upon receiving a vote proposal notification, users will be able to cast their votes within their mobile apps. Future iterations will include more analytics data on outstanding loan balances and P&L (Profit & Loss) statements. The app will also include a virtual card which will serve to compliment the physical card sent to every Cobalt Lend user.
In order to provide the platform token, CBLT, with enough liquidity they’ve partnered with Balancer, Bancor, Compound, Mooniswap, and Uniswap. Compound and Balancer will allow CBLT to be used as collateral for taking out loans. Bancor, Uniswap, and Mooniswap will create liquidity pools needed for exchanging tokenized assets. These pools aren’t intended to be used until after the ICO, and will not be liquid until the ICO has concluded. In order to participate in the ICO you must register for an account on their website. You’ll need this account in the future to redeem dividends and staking rewards. The ICO will begin October 31st and last for 30 days so plan accordingly. To learn more about the project watch the video below for a comprehensive review.
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