A few weeks ago we outlined the possibility of acting as a escrow agent for steemit P2PLoans . The main idea is to give out loans to steemians who would use their account´s reputation as collateral, the higher the reputation of an user the lower the risk for investors.
If a borrower fails to pay the loan or tries to scam other investors he could suffer from flagging, thus losing its account future payouts. In essence the risk of misbehaving is greater than stealing.
Luckily for us @kenny-crane (62) has volunteered to try out the system with a small loan, here is the application form filled out by the user:
Description: Test Loan to try out the system and be involved in the SteemFund project.
What funds would be used for: I may just let them sit in my account on steemit, or maybe I will power up the steem so I can increase my voting power a little, then buy steem to make the payments, or just do one power down for repayment which will more than cover it.
Amount of loan: 600 steem.
Duration of Loan: 3 months.
Annual APR: 20%.
Since I do not have a python script set up to automate payouts and this is the first ever P2P lending on the platform we would like to keep things simple, so here are the rules for the investors who wish to give this a try:
1.- We would be looking for a maximum of 10 investors for this loan, so if you wish to invest send a minimum of 60 steem to @steemfund with the memo "kenny-crane Loan 1"
2.- This loan will pay 20% direct APR, which means that in 3 months a total of 630 Steem will be paid back to investors in 3 monthly installments of 210 Steem. The money will be sent to @steemfund and then redistributed to investors.
3.- If the target of 600 Steem is not reach we would be returning the Steem to the investors.
4.- If any of the monthly payment is delayed a fee of 0.05% of the overdue amount will be charged per day.
5.- If the borrower misses any of the monthly installments by more than 60 days his account will be automatically auto-flagged by @steemfund.
6.- Steemfund acts an intermediary amongst investors and borrowers, we take no responsibility for the actions of the borrower.
7.- No fees will be charged for the escrow service to the investors or the borrower.
Besides the loan we really want to test out this new concept, if you have any comments regarding the system or if you are a developer and want to contribute either with a payment script or a GUI for the project, please contact me on steemit.chat
Regards,
@chitty
I am happy to have been chosen as the first SteemFund Recipient! I have received the 600 steem in my wallet and I'll probably let it sit there. I had thought of powering it up, but that won't make much of a difference. I had thought of selling it, and buying it back for the payments, but I expect the price of steem to go UP, not down!
Thanks for letting me be the first to use this service; hopefully the first of many more to come! Thanks to @chitty and the investors, and also to the steem dev team, witnesses and the entire steemit community!
Good morning.
I am in with 100 Steem:
I find that community operates micro loans can be a great help. Good initiative!
Cool, Not much left to go now.
that's very interesting just what we need to pay solar panels and invest in renewable energy at the same time!
hm but maybe the payback can be variable! depending on the number of investors and nature of investment
and ... suppose we can exchange a steem fund share token so I don't have to wait the whole time for roi and other's could came in! buying my investment... ;)
Hello, I answered your question on another comment:
I know there are plenty of people who would ask for a loan, I wish to know if there are enough investors to create this micro-funding platform.
Do you have any regulatory concerns? I see some others already asked on the original thread, but I didn't see answers.
Well I am not charging any fees.. not making money from it.. so nope, not really.. if this develops into a business then this is something that needs to be considered. However there are other p2p lending sites out there working legally so I know it is something that can be done.
I like this idea (though I'm not a huge fan of financial borrowing in general, I can see how micro loans can be helpful and I do think supporting them on the platform makes sense). I think I'll try it out. If more people contribute beyond the 600 in this example, will it be timestamped and the extra returned to those who got in too late?
I'm in for 200:
Hey Luke, thanks for participating. The main idea of this loan is to think of ways to improve the system and make it less reliable on the escrow (me)... I guess for that I would need at least one more person to help me and give them authorities of @steemfund account.
I have also thought of creating tokens so that investors could sell their investments (like @eliowilson proposed) but it is not practical to create 1 token per loan.. it would have to be sort of like a fund, I have a post ready with that idea but again I don´t think I have the time to carry out a project of that magnitude by myself.
In the past, I have seen all P2P Bitcoin lending past fail, mainly because the borrower has nothing at stake and can easily walk away with the money.. this is not the case anymore, anyone who steals will get flagged by all my accounts and I assume others will join me, thus preventing him from ever making money again on steemit.
Anywayz, to answer your question: yes, it will be timestamped, first investors will have priority.
I think for this to work well, it would also have to be tied into a solid account verification system. We have to know that this is a "real" person and they intend to stick around Steemit for a long time using that same account.
Since, in a sense, Steemit accounts are just like bitcoin wallet addresses, I can see people just spinning up new accounts and continuing on. Basically, I imagine some level of fraud will be unavoidable. We see this on exchanges as well, "Whoops! Sorry, we got hacked and now all the moneys are gone. k. thx. bye."
The Steemit reputation system is a start, but it's not as detailed as I'd like it to be. I'd like it to be tied into social media accounts (Klout score type stuff?) and maybe even some kind of verifiable trust system. My intro post, for example, includes links to multiple online identities:
https://lukestokes.info/
https://www.facebook.com/bestoked
https://twitter.com/lukestokes
https://www.linkedin.com/in/bestoked
https://keybase.io/lukestokes
https://onename.com/lukestokes
https://about.me/luke.stokes
From there people can find my business (FoxyCart.com) which means I have a lot to risk if I screw someone over. My reputation is more valuable to me than the score shown on Steemit.
Yes, I think there will always be a certain level of default rate. But people wont be able to just sign up for accounts to ask for loans because there is a minimum reputation needed to ask for a loan, so even tho we dont know if this person intends to keep posting in Steemit we will know that everybody that asks for a loan has been a blogger and has earned some rewards and reputation, so they risk their possible future rewards (unlike other p2p lending platforms they have something to lose).
However, I agree that if this idea takes form and a GUI is implemented then a personal ID verification would be a must.
I would like to state that the idea is 100% Open Source, anyone can take it, improve it and make a business around it. I have always thought of myself to be a better thinker than a developer, so I just like to throw this concepts out there.
Speaking of which, I will give you a preview of the idea I have for token implementation (this does not mean I will do it, they are just my personal notes): https://www.evernote.com/shard/s673/sh/b15e7d18-847a-472e-950d-bbfc4e2c8f45/e33506918d38af86bfdbb408124ce680
Hi @Chitty, i think i also going to try this. I DM you please check it. Thanks!
Hey @awesomenyl.. Yes I know about your application, wanted to test it out first and get some feedback before rolling your request. That is why I decided to donate some money to you before, until we have this properly set up.
I think that if there is interest from investors you could be the second borrower.
Wish you the best of luck on your new birth, I haven't forgotten about you! :)
Thanks chitty! Please let me know when? I need this like asap. Gonna give birth in 2 weeks. :)
ill join in for fun just let me know when u have the other 9 people
Hey Kings, well it doesnt have to be 9 investors, that was the maximum. At the moment we already have 50% of the funds = 300 Steem, I will chip in another 100 today so we only need 200 to activate the loan.
Thanks for always reading!
sent 60 :)
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I think this system is ingenious. Many people want to start up projects yet don't have the immediate funds and I think this is a great way for users who have amassed a great amount of steem to contribute a low risk amount of steem into a project.
But is flagging enough to protect that investment?
What would the requirements be to take out a loan?
Can't wait to see how this plays out and will keep it on the table as another option to fund my website after I'm finished with the buissness plan.
Great stuff man.
Followed.
A very interesting thing,maybe someone want to borrow some steems through commuinty.
20 % is a huge interest rate, why did you choose such a rate ?
what exactly is the positive effect of a additional 600 steem power. i dont understand that part till now. i dont know if i hv seen much effect or difference, from when i had 50 steempower to now that i have 1000. does it affect how much you can earn from a post?