This interview is part of our new Blockchain In Lending series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and lending.
In this interview we speak with Csaba Csabai, CEO of INLOCK, to understand how his company is using blockchain to transform the lending business, and what the future of the industry holds.
1. What’s the story behind INLOCK? Why and how did you begin?
CC: There are several personal occurrences behind the foundation of INLOCK. The founder team has been dealing with cryptocurrencies since 2013, so we have been able to keep track of both technology and ecosystem developments. Observing these developments, we can tell that the purpose and importance of cryptocurrencies has been constantly changing over the years. Right now, they function more as a Store of Value than as a Medium of Exchange. The role of Medium of Exchange was slowly taken over by stablecoins and looking to the future, it is clear that this is a new kind of economic status quo. A good example for this is the Facebook Libra project. The use of cryptocurrencies has narrowed down just as it happened with precious metals. Although they are becoming more and more valuable, their spending is becoming more and more difficult, not to mention giving up future value growth. The purpose of creating INLOCK is to resolve this anomaly. We ensure the availability of cryptocurrencies without sacrificing their store-of-value function and future value increase. The best solution we found was a peer-to-peer crypto based loan service.
2. Please describe your use case and how INLOCK uses blockchain:
CC: INLOCK helps companies and individuals whose income is mostly in cryptocurrencies and would like to refinance their expenses with crypto based loans instead of selling their reserves. INLOCK is the answer if you have to refinance milestones of long projects but also need to pay out employees on a weekly basis or manage the volatility of your company’s assets. With INLOCK you do not have to sell your own crypto assets at an unfavorable price. We are the best choice for those companies or individuals that believe in the crypto ecosystem and do not want to sell their future wealth.
On the other hand, we provide a solution for hedging your crypto investments’ risks. If you are looking for some profit while staying in stablecoins, INLOCK is the solution for you. You can deposit USDC, become a lender and start earning interest right now. What’s even better: with INLOCK, you can set your own interest rates.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
CC: Since we provide a peer-to-peer, we cannot share any specific information about our clients without violating their business or personal rights. All we can say is that we were able to effectively mobilize our existing customer base in the first quarter, so nearly 50% of our registered customers have already used INLOCK’s services at least once. Most of our corporate clients are on the lending side, for them, INLOCK is an alternative financial product that enables them to utilize more effectively the capital of their companies that would either just be sitting on their bank account or is reserved for later investments.
4. What other blockchain use cases in the lending industry are you excited about?
CC: Blockchain technology will definitely revolutionize the lending industry in many ways and peer-to-peer lending is just one of them. A number of pilot projects are currently underway to test these possibilities and we are always keeping up with them. To name a specific project: In one of the EU Member States, the central bank is currently running a pilot blockchain based project to establish an interbank information system where credit collateral and related financial transactions can be recorded independently, be it real estate, a motor vehicle or other work of art. Decentralized storage of this information can greatly improve the accuracy of data and reduce fraud and document forgery related to collaterals.
5. Where will INLOCK be in 5 years?
CC: We are dealing with a service whose market is still evolving and the credit industry is also calling for innovation. We believe that peer-to-peer finance and its applications will play a particularly important role in the coming years as it is the only way to make financial services truly accessible. However, cryptocurrency-based loan platforms are only the first step in this long journey. There are plenty of possibilities that can be taken advantage of and we have many ideas for the future. Looking at our research and development plans, we can tell you that we are going to create countless innovations that will fundamentally change the way the lending industry operates, and even its perception. Borrowing is not only a constraint but also an opportunity and we are working to make this opportunity understandable and usable for everyone.