Big Interview with CEO LendaBit.com – Deniss Moscenko
Deniss Moscenko, the CEO of LendaBit.com, has over 20 years of experience in fintech, risk management and startup development across various geographical regions. Deniss is a visionary leader and an ardent advocate of P2P lending and decentralization of the economy.
What is your personal background? What made you decide to pursue P2P lending?
I am originally from Latvia. This is where I got my Bachelor’s degree in Economics and spent over 10 years working in diverse managerial roles. For a long time, I was responsible for risk management in a large bank, before ultimately becoming the head of the asset management company. Being so involved in banking and fintech industry as a whole, it was simply impossible to ignore the opportunities presented by online P2P lending.
What is the idea behind LendaBit.com?
In my lifetime, I witnessed how P2P lending went from novelty to mainstream. Companies like Zopa, which people described as disruptive at first, have long become part of the financial framework. In March 2019, Zopa reached the $5.1 billion lent-to-date milestone.
But despite its wide acceptance, trust has always remained an issue in P2P lending. The industry needed a financial instrument to make it more secure and transparent. This is where blockchain fit in perfectly. We decided to leverage this new technology to fill the trust gap in P2P lending.
As you may know, transactions are recorded on blockchain, which are immutable and available for public viewing. So lenders and borrowers can sleep well knowing exactly how their assets are securely handled and that nobody will be able to tamper with the system.
Why did you focus on crypto-backed lending?
Mostly because it’s a rather unexplored area with lots of hidden potential. A blue ocean, so to say. Just think about it. P2P lending went online in 2005, Bitcoin became a thing in 2008. The first online P2P lending platforms are young. That’s definitely insufficient for the industry to get oversaturated.
But despite P2P lending being a rather new phenomenon, the industry is bustling. We believe blockchain is only going to make it more popular by providing an extra layer of security and transparency.
Who borrows with LendaBit.com?
Everybody who needs fiat, but doesn’t want to part with their Bitcoins.
Many people already use Bitcoins as their main assets, but the world is yet to accommodate to this new currency. You can be a Bitcoin millionaire and still struggle to get a loan from the bank, as most banks do not accept crypto as collateral. Even getting groceries can be an issue when all you have is Bitcoins.
Of course, you may exchange some of your coins into fiat, but most crypto owners would prefer not to do it. It’s hard to predict when Bitcoin is going to increase in value, so it’s safer to just hold onto it.
Who is your typical lender?
Our lenders are people with extra liquidity ready to expand their fintech expertise to crypto lending marketplace. Essentially, they definitely know how to derive the most benefit from their digital assets.
They understand that the best way to make money is to invest it. So they fund a bunch of loans and earn quite good interest as a result. A much higher interest than a regular lender would get with bank deposits or even shares.
And the best part is that there is no risk involved. Even if the borrower defaults on the payment, the lender still makes profit on a crypto-backed collateral. In any case, we set the initial LTV ratio to 50%, so the borrower has a strong incentive to keep up the payments. But any lender or borrower can change this ratio(from 50-80%) to be more or less risky according to their own perception of the market.
What, in your opinion, sets you apart from other P2P companies?
We give more agency and independence to our clients. Any person can register at LendaBit.com and set their own loan requirements. We do not intervene in any way. It is up to lenders and borrowers to find a compromise and strike a loan deal that satisfies all the parties involved. It’s decentralization at its core.
And it means you are completely free to change all major conditions of a loan offer/bid – Interest Rate, LTV ratio, Margin Call, Maturity Period, etc.
Our borrowers and lenders can find their own place in the fintech marketplace without being obliged to some enforced conditions.
In addition, we boost customer motivation by having all sorts of sales and campaigns on a regular basis. For instance, recently we’ve reduced many of our fees to make it easier for newcomers to get started. Just keep an eye on our social media channels, and you’ll catch quite a lot of cool offers.
Describe the most important milestone you’ve accomplished in the past month.
The past month was quite busy, with lots of highlights and improvements. For instance, there have been 18 system updates, further boosting its security and functionality. We’ve significantly improved the user interface for borrowers, in particular, there are now 4 borrowing options, new collateral currency ETH has been introduced, adjustable LTV ratio(from 50-80%) and many more new perks are yet to come. Rest assured.
Can you give us a sneak peek into what’s coming next?
Of course! First of all, we also want to add the option of fiat borrowing, as many of our customers don’t like dealing with exchanges. Fiat P2P lending will be initially available for customers from Asia, then for Europeans and afterwards worldwide.
Meanwhile, we’ll do our best to introduce the possibility of P2P loan issuance using Ethereum smart contracts, which will automatize the transactions between lenders and borrowers. Smart contracts will be a huge step towards real trustless deal striking on the platform – no need to trust anybody is the strongest advantage of blockchain as technology. As a matter of fact, introduction of multisig escrow will add significantly to our security and reliability.
Do you plan to launch an ICO campaign?
We do not have such plans for now, as this market segment has lost its appeal. But we cannot completely exclude the possibility. Never say never )))
Do you believe crypto-backed lending is the future?
It’s hard to make predictions because the crypto market is still emerging. But even though many companies pop up every day, the supply is yet to meet the demand.
At LendaBit.com, we hope that the blockchain-backed lending model we implement will become widely accepted by all financial institutions in the future. Blockchain offers a way to make loan procedures, exponentially faster and simpler. It’s high time for the financial world to take notice and upgrade its systems.
Conclusively, if we did not believe in the future of crypto-backed lending – we would not be the part of Lendabit.com.