With Zippay stuck in yet another trading halt for capital raising, we are all starting to wonder what this could be for? Maybe they are looking to grab a slice of the pie of Coinbase IPO on the NASDAQ overnight and announce something Crypto-related?
So What’s Zippay got to do with the Coinbase IPO?
Coinbase, whose users primarily deal in bitcoin and ethereum, reported last week that its revenue soared 847% in the first quarter to $1.8 billion and that it now has 56 million verified users. Coinbase is listing on the NYSE tonight in what is set to be a massive make-or-break moment for Crypto.
Potentially Zippay is looking to get in on the action and start their own payment system on the blockchain? This would potentially deliver massive benefits to Zippay and their merchants. Maybe and just maybe, they are looking to launch a peer-to-peer payments processing method and cut the banks out of the action altogether.
Crypto Lending on the Blockchain
Utilizing blockchain technology, borrowers and lenders are able to enter a loan agreement without the need for an intermediary. Instead, self-executing smart contracts enable trustless transactions. According to DeFi Pulse, a DeFi analytics and rankings publication, $2.29 billion of value was locked in the DeFi lending market as of September 2020.
This could be a massive upset to the banks whom typically require companies to hold massive debt facilities on their balance sheets in order to fund business. With Zip pays debt facility hitting upwards of 250million, this is a burden they currently have to carry on their balance sheet. However, with peer-peer lending on the Blockchain, this could be about to end.
Peer-Peer Lending in the BNPL Industry Makes Sense
With deposit-taking institutions currently offering a yield on deposits of <1% now is the perfect time for Zippay to launch a peer-peer lending product.
The maximum amount a user can borrow is determined by the amount of collateral provided, also known as the collateral factor or collateral ratio.
In exchange for providing these funds, lenders receive interest from the borrower and repayment of their principle sometimes, but not always, within a set timeframe. Smart contracts automatically execute the loan and uphold its terms.
This would allow users to pledge money against the loans that other borrows take out and allow them to potentially reap more than they would sow in the bank or public traded markets.
Z1P and Crypto: Prophet’s Take
Prophet is bullish on both the BNPL and Crypto Markets and we imagine peer-peer lending on the blockchain will be massive in a low-interest rate environment.
Please Remember all Articles Published on Prophet Invest are Opinion only
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