A new integration within the Trittium ecosystem: Testing and analysis of TrttLoans solution
By Inkarias - 2020-08-14
Before going into the details of this new implementation, it is important to understand the issues and the advantages of crypto loans compared to the traditional loans of our modern banking system. A crypto loan, or more commonly called crypto-backed loans, works like a traditional loan except that crypto-currencies must be put as collateral. It is therefore essential to have collateral to borrow. In some cases, borrowers need to post more collateral than the value of their loan to protect lenders from the risk of losing money. To take out a loan, all you have to do is go to a dedicated platform, request the desired amount (in fiat, crypto or stable coin) and indicate the cryptocurrency to be sent as collateral. On the most decentralized platforms, no need to enter your identity to set up a loan file. A smart contract (a stand-alone program that runs automatically following predefined conditions) is designed to hold the crypto and obtain the loan instantly. If the borrower does not repay the loan, the smart contract is liquidated, and the money goes back to the lender. Interest rates are generally set either by algorithms or by the platform directly.
Bringing loans on top of blockchains for a wide and growing community offers some benefits and advantages over the traditional system. Since there is no credit score and file review, each crypto holder can take out a loan easily and quickly. The transaction is transparent because the necessary information is entered in a smart contract, which is audited to reduce the risk of flaws and bugs (even if zero risk does not exist). The borrower has control over the funds that are lent to him because he has his private key (a series of numbers and letters that can be compared to signing a check).
Obviously, the criteria for granting a loan are less drastic than those of traditional banks, since only a crypto guarantee is required. A specificity that is not necessarily a quality: the safeguards of the banks are also there so as not to worsen or create situations of over-indebtedness. Technically, crypto loans are for anyone who can access the Internet. They are advantageous for those whose files are refused in the traditional circuit. It is also a good alternative for those who have difficult access to traditional financial services. On condition of being able to over-guarantee his loan. Most of the existing platforms, especially the less decentralized ones, do not have a good user experience. They suffer from a lack of liquidity like decentralized exchanges. “A new financial system is an exciting idea but is useless without liquidity. To encourage liquidity, it must be fair, easy, economical and fast to trade in each market. Therefore, Trittium brings new horizons with its own integrated solution: TrttLoans.
TrttLoans Testing phase and overviewDuring the past few weeks, we had the opportunity to participate in a testing phase of the platform in order to be able to test the different functionalities of the solution https://loans.trittium.cc/. For a total of two weeks and among a total of ten testers, we performed various tests on behalf of Trittium with recognized currencies such as BTC and ETH, USDT and PAX. The entire test phase also shed light on certain drawbacks or problems encountered during the creation and repayment of a loan in addition to being able to perform these operations directly. The various obstacles we are referring to have already been resolved by the team very quickly in order to be able to offer the community the official launch of this system soon. We will divide this overview of the solution into several parts, according to the different steps to be carried out when creating a loan within the Trittium ecosystem but without detailing all the technical principles that you can directly consult on the official Trittium website at: https://trittium.cc/. However, it is mandatory to precise that TrttLoans is fully included in the ecosystem through SSO and allows investors and community members to use their TRTT on the platform easily in a few clicks as every solution is tied to others in a wide and unique network/ecosystem.
The article is made up of separate parts to explain the following:
- How to make/create a lending request on TrttLoans
- What to do once the loan has been accepted?
- How to lend money to a loan request application
Once logged into the site, you will be redirected to the main page namely the “Loan Market” tab. This tab lists every live request made by other users and still waiting for funding. The current user’s TRTT balance is shown in the top right-hand corner with the equivalent in BTC. This serves as the main dashboard to control the funds as TRTT is used for fees on the platform.
The main interface is divided into several categories:
- “Loan Market” as we stated above, which serves to list and create new request on the market. This part will be detailed further in the next section.
- “My loans” allowing to easily control the ongoing loans in a few clicks. This tab displays both current and previous lending/borrowing operations depending on the status ( Active, Published, Drafts or Archive).
- The “settings” tab allowing to change profile and security settings associated with the user’s profile. You’ll be required to enter once again your credentials to be able to access the data and modification tools.
- The “Support” section which redirects to https://megano.atlassian.net and allows to get support from the team. It is however possible to reach them on other social medias for other questions or enquiries.
- “Service fees” tab to get all the information regarding the costs associated with the operations on the platform.
Finally, the two other buttons redirect to other Trittium application such as the official explorer and TrttNodes solution.How to create a lending request and finalize it
In order to create a lending request, you must click on the “Borrow button” on the right on the main page.
The next step is to fill the loan request panel with the exact information as required. This will be the loan options for our operations. In this example, we are using a 12 USD loan with a delay to pay the loan up to seven days. The other metrics are set at 80% per year rate and a 75% Loan to Value ratio. In a nutshell, LTV Ratio is a calculation used to assess the risk of a loan. A loan with a higher LTV ratio is generally seen as higher risk and a loan with a lower LTV ratio as lower risk.
Once we have filled the basic information about the loan, we must choose in what coin do we want to receive the loan: BTC, ETH, PAX and USDT (More coins will be added soon by the team). In the example above, we choose to use BTC. Therefore, we must select the address where we want to receive such Bitcoins, and also, we must choose where do we want to receive the collateral once we pay the loan (In 7 days). Finally, we must select how do we want to pay the platform fees (using TRTT currency to pay for the fees brings a 20% discount) and accept the terms and conditions to “create request”. Until official launch, some exchange parameters are set to a fixed ratio but this might be subject to changes in the future.
After pressing the “Create request” button, a new window will open summing up all the previous information filled during the creation process. The image below shows the confirmation that our request has been taken into consideration by the system.
The request is also added to “My loans” dashboard after this confirmation page. In the meantime, even after creating the request , another side is required to fulfil the operation.
The request is pending on the market until someone completes it.
Once the loan request is accepted from someone at the market, we will receive an email. In the email, the system asks us to send the collateral to the lender in the next 24 hours.
After sending the collateral, the lender will also receive an email to notify him and ask him to send the loan to us. The official email received by the lender looks like this:
So, now the lender must send us the loan and has 24 hours to do it. If he does not, we will receive back the collateral we sent earlier in order to recover the pending funds. When the lender sends us the loan, we will also receive a notification by email:to My Loans>Active, we can see the Loan status and the date to make the loan payment.
By going to “My Loans> and then Active”, we can see the Loan status and the last date to make the loan repayment. The trttloans platform also updates all the steps in our loan details screen, including amounts and timestamps for each operation previously made.
Lending money to a loan application
After introducing the lending process, it is also important to add some words about the other side integrated into these operations. As a lender we can go to the market and lend money to a borrower (lending requests detailed in the previous section).
In this case, as we are lenders, we can only see the same loan parameters, but also cannot change the used currency as the loan return must be in the same currency as lent, and the collateral is always in BTC. Now we must press on “Issue Loan”. A loan details confirmation page will also show up in the process, summarizing all the previous information.
After this step, the borrower must send us the collateral within the next 24h. The platform will show us when the borrower sends the collateral, but we will not receive an email and confirmation until it has enough confirmations. However, once the collateral is in the platform, we receive an email notifying it and asking us to send the loan amount.
The transfer loan link takes us to the platform, where instructions are updated and precised. We have 24 hours to send the loan amount. Once we send the loan and the platform detects it on the chain, we can see the loan status updated on the platform in real time.
This article sums up both lending and borrowing processes within the Trittium ecosystem and the new TrttLoans solution.
Disclaimer: All the funds used for our operations have been given freely by the team. All the expenses were covered by the team in case of errors or bugs that could occur. The information and images stated in this article may be subject to change in the future and at the sole discretion of the Trittium team. If you are looking for more details about the project and their solution, you’ll be able to find all the details on the official pages:Main Website: https://trittium.cc/TrttLoansTrttLoans: https://loans.trittium.cc/TrttNodes: https://node.trittium.cc/