Can block chain loans change the pre-raised approach for ICO?

nnnETHLend has developed a de-centric block chain loan application for funding ICO, hoping to enable emerging companies in the field to more easily meet their capital requirements before formal ICO, and thus For the ICO after the product development and team development to set aside more tokens. But this block chain loan is only a way to subsidize the ICO weaving, and can not completely replace the ICO.n
nnTranslated by: Inan
nBy June 2017, the number of ICOs had increased to 76, raising $ 800 million. As with other general start-up companies, the chain chain start-up companies need funds to meet capital requirements before starting a formal ICO. At present, many ICOs require certain marketing budgets, tokens to sell smart contract development and professional teams to assist them.n
nThe chain-chain start-up company, ETHLend, has developed a fully decentralized application that can create block-chain loans to finance projects and products prior to pre-IPO (initial ICO). Block chain companies can use this block chain loan to finance the pre-sale phase.n
nThe mechanism is simple: Block Chain Entrepreneurship companies will use the APF Smart Contract to create their ERC20 tokens. This token will be used for the initial. Block Chains Start-up companies promise that a certain number of these tokens will be used as a mortgage on ETHLend DApp to receive Ethernet. Once the official ICO is over, the chain chain company will repay the loan and recover the token (for development funds).n
nWhat are the advantages?n
nBlock chain start-up companies can get from the pre-sale to the formal start during the working capital. Therefore, they do not need seed financing and surrender precious equity. In addition, such working capital can be used to reduce the amount of tokens to be sold during tokens. In this way, you can set aside more tokens in the future to attract talent.n
nBlock chain loans are new “encrypted bonds”?n
nBonds are a common way for start-up companies and businesses to raise funds. The main difference between block chain loans and bonds is that the lender can not transfer the loan to a third party. The lack of transferability makes the block chain loan different from the regulated bond.n
nIndeed, block chain loans are unregulated, so lenders and start-up companies should take additional precautions when issuing and subsidizing these loans. The main risk faced by lenders involved in this “encrypted bond” is that ICO’s results may not reach the upper limit of financing and thus can not repay the loan.n
nRegardless of whether the chain chain companies consider issuing such loans, people should pay attention to the amount of loans and mortgage ratio. Block chain loans may provide working capital during the white paper / prototype release to pre-sale or initial ICO. On the other hand, replacing the ICO with this loan is not a good idea because the chain chain start-up company must calculate the repayment amount, which in most cases will be related to the funds raised during the ICO.n
nWhat is the centralized loan?n
nUsing block chains, anyone can borrow and lend money in near real time at low cost anywhere in the world. Centralized loans have brought many undiscovered advantages that do not exist in the current loan system:n
nThe interest rate on this global lending market will be determined by the user, regardless of location. This solves the problem of interest rate differences affecting countries around the world. Specifically, third world countries (such as African countries) suffer the most, micro loan interest rates can be as high as 40%. While the cost of loans in the chain chain is very low, can make micro-loans more affordable and efficient.n
nAutomation and trust creation can lead to cost and time-consuming issues when using smart contracts on a de-centric network, such as an e-Square. And the use of the right tools no longer requires expensive and time-consuming clearing houses to make tools more efficient and reliable financing.n
nWhile the pseudonym address seems to be a challenge for loans on the APF, but the chain solution – for example, using AI to analyze transactions on the chain chain, implementing the chain KYC or application forecasting market – may be completely de-centered The key to the loan system.n
nICO raised fundsn
nIs the chain chain loan a new way to subsidize the zoning company before ICO? We are not clear. But we are convinced that these loans may help those chain-chain start-ups that are worried about financing before ICO get funding from their early participants who believe in them.n
nETHLend will put the loan on its own platform, so that start-up companies to meet the capital requirements and ICO to raise new industry standards, in order to test and provide proof of the concept. They will use their local LEND tokens for a variety of loan-scale mortgages, all sizes of the budget are free to participate. After the ICO, everything will mature, and all lenders will recover the premium they have promised to coin and start the company.n
nThe success of a chain-based start-up company will depend on a number of factors, such as the presence of products (such as DApp), strategic exchanges (such as white papers, schedules), concepts themselves and transparency. Taking into account all of the above factors can mitigate the risk of project financing that leads to loss.n

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