A Quick Look at an Early Working Prototype of the Upcoming Hive.Loans Account as Collateral Community Lending Pool!

in #coding2 years ago (edited)

A quick sneak peak at an early working prototype version of the upcoming Hive.Loans service.
While not anywhere close to being ready for public alpha testing quite pleased to announce that the project at this point in time is a working prototype. Lots of functionality and polishing has yet to be poured into the remainder of the pre-launch development cycle of this project.

CLICK HERE TO VIEW AND VOTE THE PROPOSAL
CLICK HERE TO APPROVE PROPOSAL WITH HIVESIGNER

Securing & Empowering P2P Lending on HIVE

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Users will be able to use their account and the Hive Power contained within it as collateral to gain access to loans of liquid HIVE. During a loan borrowers will relinquish their accounts keys over to the Hive.Loans site which will then proceed to change the keys to secure ownership and thus mitigate any potential for defaulting on the loan contract. The borrower will be provided with the new Active and Posting private keys so they can continue to post and transact on their account as normal. All borrowers account keys will be returned at the end of the loan period after all outstanding amounts have been paid off in full. This method ensures Lenders get repaid and that Borrowers can't default.

Lenders can specify the amount they wish to lend as well as the interest rate and duration in number of days they'd allow for borrowers to repay, then from there if a borrower finds a lenders loan contract acceptable they can accept it and be locked in to the contract repaying the outstanding debt out of their weekly powerdowns automatically via the service scheduling payments.

Durations from 7 to 91 days can be selected with the current acceptable range of interest charged falls between 10% to 30%. The amount to be loaned out is uncapped although the minimum loan amount will likely end up set at somewhere around 10 HIVE as it'd be trivial to loan any amount less.

Tamper Proof Automated Loan Repayments

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Hive.Loans monitors every block on the HIVE blockchain watching to ensure that borrowers aren't trying to pull tricks to get out of their repayment scheduling. Any attempts to change keys, edit powerdown schedule or transfer out HIVE bookmarked to be used as that weeks repayment will result in the borrowers keys being revoked, a contract tampering fee being charged and their account being rendered inaccessible for the remainder of the loan duration.

Upon loan contract repayment and all additional fees the borrower will have their account keys returned and thus ownership of their account. The loan contract will then be marked complete.

A Truly Unique HIVE Exclusive App


From the brief research into this type of lending pool resulting in very little in regards to information alluding to this sort of thing even existing anywhere else I'm quite confident to say that this project and service model is the first of it's kind in the entire crypto ecosystem. The unique toolset and on-chain functionality that HIVE offers culminate into an orchestra of HIVE blockchain exclusive operations being meticulously engineered in a such a way to facilitate a zero-risk lending environment for both borrower and lender.. Only on the HIVE blockchain is such a feat possible.

This isn't just a cool new lending app coming to HIVE in the upcoming month.. No.. This is a completely brand new paradigm in lending models and an innovative step forwards for decentralized borderless banking. With further development and fine tuning this new Account as Collateral lending model could serve to perhaps in the near future pay for down payments on property or help raise seed capital to develop the next killer app.

Want to Support Development?

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Help support the development of this and many other projects that I work on by upvoting this post, reblogging, commenting, donating and spreading the word about these upcoming potential game changers coming to the HIVE ecosystem. If you'd like to support development directly feel free to send over HIVE or HBD to the @hive.loans account, or alternatively you can delegate some HP to either myself or the @hive.loans account. Part of me is debating open sourcing this application after creating a development proposal for the project with a sane daily pay rate of $50 a day or something for the next 2 months to fund the finishing of the working prototype and get it ready for launch.

If this project is the sort of thing you'd support in a proposal and you'd like to see this software open sourced leave your thoughts in the comments below. Thank you for reading and voting. <3

CLICK HERE TO VIEW AND VOTE THE PROPOSAL
CLICK HERE TO APPROVE PROPOSAL WITH HIVESIGNER


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Very cool, looking forward to this one :)
I'd like to see everything open sourced, in this case it would allow for independent security audits and help build trust in the market. I'd vote a sane proposal to help support if its opensourced, and/or offer help with development & auditing if ya want

Highly appreciate the weigh in on your thoughts.

Never had much luck with the proposal system but I reckon that this project could certainly merit having a god at it. Somewhere along the lines of $40 - $50 a day for 2 months would pay for atleast 4 hours of development time on the project a day until it's ready for a v1.0.0 launch.

Perhaps I'll draw out a roadmap and development checkpoint summary and put them into a proposal. Been working the past 16 hours on the site so far and likely will finish up a few more functions that I'm working on before I relax for a bit. Will maybe work on the proposal on my down time after this. :)

Do do do do. Ill vote it.

This model also serves as a way for people to instant-power down for a 30% fee.

Along those lines, you might want to have a waiting period before giving the liquid funds since this would be a great workaround for stealing people’s accounts, or at least 70% of it.

Not exactly a great work around for stealing accounts as unless your recovery account is set to one on the whitelist before the theft it take a whole month for the recovery account to change to one the site accepts..

Ideally the wait time from accepting a lending contract to your keys being replaced and HIVE sent to account is less than a minute.

Oh, that’s right. I forgot they won’t be able to transfer funds once the keys are changed.

What happens if the account and recovery account are both in on the scam?

For instance,

  1. An account request a loan
  2. The keys are changed
  3. Liquid Hive is send to the account
  4. The account changes back their keys using the recovery account system
  5. They send those liquid funds to an exchange and have retaken over their original account.

They can't change back their keys as they won't be their own recovery account.. An account owned or in partnership with Hive.Loans will have recovery rights on their account.

Cool. Thanks and great idea.

No worries! Yeah it's a bit much to wrap your mind around at first.. Took many hours trying to do model the correct workflow for something like this to work.

Users will be able to use their account and the Hive Power contained within it as collateral to gain access to loans of liquid HIVE

Fuck yeah, finally.

It should really change how people look at their HIVE accounts and HP holdings..

This will be a huge boost to the liquidity of lots of users.

And it provides more sinks to Hive power - which is great. The more use cases for HP the better!

At one point we will consider reducing the inflation as there will be more utilities to do with HP other than farming the rewards.

Looking forward to future development.!

I'm not going to gloat and say this is the "killer app" that people have been waiting for.. But It certainly will be an interesting tool set to further our communities development. At the very least it will be a really neat way to help lenders and borrowers link up.. at the best it'll be an incredibly disruptive introduction to the ecosystem and we'll see people moving capital over into HIVE just to take advantage of this new found liquidity vector.

It may not be the killer app for most users, but it might have a bigger impact than we thought. Once the fundamentals are set, everything is easier!
I would vote for the proposal without a problem though - to which extent do you plan to opensource it? If you plan to do so anyway.

If it gets funded it'll be 100% open source. If not I'll probably hold onto the code and run it myself or license it out to recoup some development costs for a bit before leaking a base version of it publicly for people to build off of. :)

The ability to access liquidity will make for an interesting study for sure to see who stays staked and who uses the lending service to play markets or what have you.

Fair enough.

Do you have some specific date when it'll go live or you just go with a flow?

If I get funded the goal is rolling out v1.0.0 in 2 months with public aplha testing likely happening before then.

If unfunded it could take upwards of 6 months. Being a renegade freelancer is great and all but I still have to seek out paying jobs in order to be able to afford to code on this stuff. :/

Ah, my dream is coming true!

It's working in it's most basic form in my local development branch. When it gets to the point we can start alpha testing the proof of concept I'll let you know.

Thanks, brother! you know me I'm all about helping with testing.

Highly appreciated as usual Kwa. :D

i'd vote for your proposal

Thank you for your show of support. :)

Nice..the first Hive Bank!😀

In a sense yes. It's more of a P2P lending 3rd party neutral escrow and lending board.

Still, a good idea & way to go...away from the Banksters 😉

I would support this.

Thank you for casting your vote of support on this. Starting to type up a proposal now.

Quite interesting. What about account's recovery options? Don't see anything about it in the post. The idea is great, @neoxian is doing this in his bank. Waiting for your proposal. hopefully it'll get approved so it can be open source. Regards.

The site will offer free public recovery accounts to anyone who wants them. I'm already building a system to do it for my own internal use.. may as well allow the public to use it as well for added value and service. :)

You are a hero this blockchain needs one project at a time. Keep up the good work nd this looks very promising.

Thank you for the kind words and support. :)

This is an excellent idea!

Aye. Pretty damn neat capability to be able to do something like this using the tools the blockchain provides. :)

✅ Very good

very cool, talking about loans, and bam we have :D

Do you think that can be a long-term solution? because I think with smart contracts ( i hope with having at some point here), there should be more easy ways to do. Like a DAI version.

In general, I think Hive + loan = very very powerful.

I'd friggin love something proper for smart contracts like EVM or something.. Was thinking about gutting EOS a while back and using their smart contract logic to run as a side chain for HIVE to supply smart contract connectivity.. We'll see what happens.

I haven't put too much thought into the details of this, but do I understand it right, that the borrower will never give up 100% control of his account? What I'm trying to understand is, how decentralized is this actually (I mean obviously apart from the fact that we don't have smart contracts a la Ethereum so there will always be some centralized server somewhere)?

The borrower relinquishes 100% ownership of their account during the lending contract duration until all outstanding balances are paid. At this time the borrower will be allowed to retrieve their owner keys. This is where the term "account as collateral" comes from, as you're using your account and the value locked up in it as Hive Power to essentially insure that the loan is paid in full given enough time to power down.

The decentralization comes into play due to the fact we're using built in functionality of the decentralized blockchain in order to set up an environment in which the lender has zero possibility of losing their capital being lent out and the borrower, knowing fully well that the process of being eligible to even accept a loan contract involves not only having a whitelisted recovery account selected at least 30 days prior to accepting a lending contract but also that they'll have to hand over their account ownership completely.

The borrower gets access to the posting and active keys of the new set generated by the Hive.Loans service to take ownership of their account so they can keep posting and whatnot.. But the higher account functionality will be blocked and any attempt to circumvent this will be met with the borrowers account being locked down until the lending contract is repaid plus any contract tampering fees incurred.

Ah okay I see. I'm just trying to understand the risks involved for both parties. Let's say your server was hacked, there would be the possibility for the attacker to steal the account of a borrower. But you still have the requirement to set the recovery account to a trusted account and you know the new owner key of the borrower account, so you could recover jt right? But - purely theoretically - you could wrongfully take over the account of the borrower and he couldn't do anything about that, or not? Actually, now that I think about it, it can't work any other way, as long as the blockchain doesn't have a way to know whether the debt was repayed.

All account keys and sensitive data collected by the Hive.Loans account key custodian are going to be hashed and salted with encryption to make it incredibly difficult for a hacker to do anything with data obtained in the event of a server security breech.

Once the Hive.Loans account is set as your accounts recovery key you'll be able to use it for free whenever to recover your account keys assuming you don't have an active lending contract outstanding.

Debating the idea of leaving "breadcrumbs" on the blockchain to serve as evidence of functions going on with the service which would also have the side effect of allowing future decentralized incarnations of the service to replay up to a reproducible block state for all future clients.

really love your work!

But I got a nitpicky question: what's the advantage of using this service than say Dlease where if one opts out of the deal the contract is "just" cancelled. I know this might already be the reason for creating this, but it seems that "giving away" one's keys is something that many would not want to do

If you're using your account as collateral in a loan it's just one of those necessary evils to hand over your keys wither to the lender directly or to a neutral 3rd party custodial service in Hive.Loans case.

Once a lending contract is accepted on Hive.Loans there is no way to get out of it until the outstanding balance on the lending contract has been satisfied.

The advantage here is that you could have up to 70% of your accounts HP loaned out to you instantly if you needed it and a loan contract was available to fulfill the contract.

okay got it, that is a new use case :) 👍

Wow, awesome. My vote for you. :)

Thank you. <3

Hey this is interesting :)

Yeah man! Should be a game changer for P2P lending here on HIVE for sure. :D

How much should the colaterall be worth.... 1:1, or higher

The site model is currently set up to allow you to borrow 70% of your HP value as liquid HIVE.

guess I could explain this 70% better.

The reason the loans can only amount to 70% of the HP of the account is to leave headroom for transactions after the loan as well as leave HIVE in the account incase the user tries to tamper with the repayment automation cycle and ends up incurring a tampering penalty (not sure what these look like yet).

Borrowers will also have to have their recovery account signed over to a whitelisted partner account or the hive.loans account itself. Part of launching this service is also offering free automated account recovery to everyone wishing to use hive.loans as their recovery account in the future. Tools on-site help users change their recovery account as well as recover keys if need be.

Awesome idea. I like seeing applications like this being worked on.

If you put up a proposal for funding, you have my vote. This is one of the areas Hive needs to start delving into.

Looks good so far...await the road map.

Appreciate the show of support! The idea itself to utilize the key permissions and automate powerdown tranfers to utilize the account as collateral was something that I'd never come accross before. Moving into experimental P2P lending architectures is exciting.

I'm banned off twitter... But the answer to that is in the proposal:
https://peakd.com/me/proposals/154

Not exactly sure what this pertains to?

Gracias por compartir

Hive is the blockchain that keeps giving

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