Hey man. Thanks for your input and comments!
The interest rates will consist of two different pools, lenders and borrowers that will be able to post their preferred interest rate and open up a fill order of sorts.. The site will then match up those that can help each-other fulfill these orders. Free market will rule but there will be a cap on how low and high interest rates can be set at.
All loans at this time are planned to be secured and basically riskless due to the method we're implementing with the account as collateral system. Unsecured loans is something I've thought about however I don't want to facilitate people scamming lenders.
As for tools to determine how "risky" a borrower is I was thinking of having some sort of points or ranking system based off of previous loans being repayed as well as looking at the reputation reanking built in to HIVE.. Finally a use case for the reputation system on the network. Although the way it's being set up there should be zero chance of borrowers going AWOL or defaulting.
I'd not considered offering a second market up until you've mentioned it now. It could be an interesting addition to the business model for sure, will have to think about how to go about this, never used Prosper.
The site will run almost entirely auto-magically. The goal is to create an automated hub to link lenders and borrowers while mitigating the classical risk of lending. While the term smart contract generally pertains to systems programmed right into a chain itself we'll be handling it mostly with our own software, that will tie into the chain but as it sits I don't know if it's possible to do a classical smart contract on HIVE.
Like any project as we get it built up to the point where it becomes operational and we offer it up for alpha testing by the community I'm almost sure tweaks to the system will be implemented.
The biggest goal about this platform in my eyes is trying to make it trustless and riskless. Due to the service taking ownership of the borrowers account keys it should be possible, although this also means certain steps will have to be performed by borrowers to be whitelisted to receive loans.