Comment
Author: Admin | 2025-04-28
Blockchain services firm Eqonex Group (formerly Diginex) has launched a peer-to-peer crypto lending marketplace that uses automated protocols. Eqonex is targeting institutions that want more transparency than the over-the-counter (OTC) market provides but also don’t trust decentralized finance (DeFi) protocols that suffer from flash loans and hacks, Charlie Beach, Eqonex’s chief risk officer and head of lending, said. The institutional lending market is dominated by OTC desks that lack transparency over the interest rates charged on loans, Beach said. Related: Ethereum and DeFi, Not Bitcoin, Boosting Genesis’ Lending “You’ve got a large number of firms that are operating through a fairly small number of dominant players like a bit of an oligopoly,” Beach said. Several firms use loans to support trading strategies, and others use them to obtain working capital, such as bitcoin miners who want to keep their coins when bitcoin’s price is low, Beach added. “If you look back to the reasons why people lend and borrow in the repo [repurchase agreement] or securities lending market, you’ll see some of the same use cases in crypto markets,” Beach said. Crypto lending is a phenomenon that could potentially improve liquidity and price discovery for crypto assets. but it also has introduced systemic risks into the market. Eqonex will not be rehypothecating collateral and will charge a 1.3% fee annually, Beach added. (Rehypothecation is a practice whereby banks and brokers use, for their own purposes, assets that have been posted as collateral by their clients instead of keeping that collateral in cold storage.) Related: Sense Finance Raises $5.2M to Bring Yield Trading to DeFi Most loans that Eqonex plans to extend will probably be in the $1 million to $5 million or $5 million to $20 million range, Beach added. “The range of the pipeline ranges from the low millions;
Add Comment