Allows decentralized loans that have been promised to us
DeFi lending is an intriguing and competitive space, although there is room for improvement. Traditional lenders target a crypto audience, while P2P service providers can support a wider variety of assets. Gluwa, with the help of Creditcoin, taps into emerging markets where SME loans are hard to come by.
DeFi Lending must expand
No one can argue that lending through decentralized funding platforms and protocols has become very successful. Popular projects including Aave and Compound have created a financial solution for thousands, if not millions of people. However, they require that one already owns digital assets to act as collateral, which does not suit the needs of many. Cryptocurrency is a relatively niche market, even in 2021, and the technology is enabling much more.
Despite their crypto-only approach, Compound and Aave have accumulated a large amount of Total Value Locked, or TVL. Aave is the industry leader with $ 15.7 billion in stranded assets, while Compound has secured just under $ 11 billion. This confirms the appeal that DeFi loans have for crypto users, even if it means oversizing the loans for security reasons. However, this approach also makes both platforms less attractive to those who do not own cryptocurrency or already have access to capital but still need small to medium sized loans for various purposes.
Bringing this technology to emerging markets requires a very different approach. Gluwa offers a combination of decentralized financial infrastructure with global investment opportunities. Users all over the world can manage their finances through various features. A crucial part of this ecosystem is Creditcoin because it can tie a loan portfolio to a public blockchain. Additionally, developers can rely on Creditcoin to showcase their own apps, products, and services.
Why P2P DeFi Loans Matter
The approach by Gluwa adds an unsecured peer-to-peer element to DeFi loans, as it always should have been. Its suite of features allows borrowers to take out loans without already having a larger amount of digital assets. As a result, anyone who is alive can use the blockchain for a loan to keep their small business afloat. An important development for emerging markets and countries without a bank, as financial products and services can be difficult to find.
Gluwa’s peer-to-peer approach creates a new source of income for lenders by helping those in unbanked and underbanked markets. It is a viable financial solution for the African continent and emerging markets around the world without involving financial institutions. Additionally, Gluwa removes the need for users to own crypto before taking out a loan, making it a very different provider than Compound or Aave.
Gluwa makes inroads
The various services and features under the Gluwa banner attract a lot of attention. For example, the native Gluwa Invest The option currently offers up to 12% APY to help bring more capital to underbanked and unbanked people in emerging markets. With these lines of credit provided by Gluwa’s non-custodial exchange, the team offers transparent and trustless lending and borrowing to anyone. With the best APY rate on the market, any user can help make a positive impact and change someone else’s life.
Africa is a crucial region for service providers like Gluwa, as financial difficulties are unfortunately too frequent there. Thanks to a partnership with Aella, there is now over a million transactions on Gluwa in Africa only. Additionally, Aella, as a consumer credit app, serves over two million users, making it a great partner for Gluwa to achieve wider adoption. Transactions cover payments, remittances, investments and other activities.
The service provided by Gluwa is very different from Aave and Compound. However, it is not about being “better” rather than “supplementing” the options already available. Aave and Compound are great solutions for existing crypto holders. Gluwa does the same for the non-crypto-hodlers and the unbanked, making it a valuable contributor to the DeFi and blockchain industry. Additionally, Creditcoin’s role in decentralized finance becomes more outspoken and makes a significant difference in regions where it is needed most.