CoinLoan Review: Strong Leadership Team Provides Solid Services
CoinLoan offers high rates with an emphasis on security, but does their legitimacy make up for their lack of insurance?
CoinLoan Interest Account Review
CoinLoan Interest Account
CoinLoan Interest Account
Pros & Cons
- CoinLoan interest account offers support for many assets, including fiat and many popular cryptocurrencies.
- CoinLoan's EU-based business adheres to strict security standands and regulatory bodies.
- Lending marketplace offers customizable loans.
- CoinLoan offers no traditional insurance on their clients assets.
- Manual transactions decrease transaction speed.
- Loans seemingly cannot be paid out in USD.
CoinLoan's interest account is a tradeoff between security and speed, but the returns gained from staking their in-house token may make it worth it.
CoinLoan rates start high but can get higher if a user decides to stake with CLT (CoinLoan's in-house token). Every 250 CLT you own increases your interest in your CoinLoan account by 0.1%. The maximum increase you can receive is 2% (2,500 CLT). Minimums come out to roughly $100 for each asset with no maximums. Interest compounds daily and is paid out on the first of every month. CoinLoan has a diverse range of assets for both the casual and seasoned investor alike. Here are the interest rates for CoinLoan's most popular options:
- BTC: 4.4%
- ETH: 3.0%
- LTC: 3.2%
- BCH: 3.8%
- Fiat: 8.0%
- Stablecoins: 8.0%
CoinLoan supports 10 different assets for their passive interest bearing accounts. They have the popular cryptocurrencies listed above as well as Monero. CoinLoan supports stablecoins USDC, PAX, USDT & TUSD.
CoinLoan also allows users to deposit their fiat EUR. Although CoinLoan allows you to use USD, GBP and the Russian Ruble on their site, these currencies are not supported in their interest accounts.
Since CoinLoan does not offer traditional insurance on the assets you store with them, they must turn to other means for security. The peace of mind CoinLoan offers comes from their overcollateralized loan program. When you deposit your assets for an interest account, a portion of that amount gets put into CoinLoan's loan program to fund an overcollateralized loan. The interest paid on the loans generate profit for CoinLoan which then trickles down into your interest account. If borrowers fail to pay back their loans, their collateral is liquidated to protect CoinLoan (and you) from losses.
What CoinLoan's Interest Account Does Well
High Base Rates
CoinLoan offers high rates on nearly all of their assets. If you decide to stake CTL, your rates can increase by as much as 2% for any asset. Not only are those rates lucrative, they are also easy to understand unlike some competitors whose variable rates are affected by two or more factors. If you stake CTL you get the bonus, if you don't then you don't.
Interest Compounds Daily
Interest in your account is compounding daily with the interest payout at the first of the month. This means that with each passing month your interest is added to your principal deposit. Essentially you are earning interest on your interest.
Why You Might Want To Choose Another Service
Their increased security measures comes at a price: speed. All transactions are performed manually which means you cannot withdraw your assets instantaneously. The CEO of CoinLoan explains that any service which can provide instantaneous transactions is subject to vulnerability, no exceptions. If you are looking for a service which offers transactions at the drop of a hat, you will have to look elsewhere.
To Wrap It Up
There aren't a whole lot of bells and whistles on the CoinLoan interest bearing account program. This can sometimes be a good thing. Marketing ploys are a common indicator of suspicious activity in the DeFi space. Overly complicated processes obfuscate consumers and there's really only one reason why a company wants to be unclear about their services. CoinLoan is simple to understand, easy to use and offers competitive rates. Just remember that all their security is handled in-house in a relatively painstaking process so you might have to wait a bit longer than normal to have your transactions clear.
CoinLoan Loan Review
CoinLoan Instant Loan
CoinLoan Instant Loan
KYC NOT required
At CoinLoan you have the benefit of high LTVs and customizable loans, but CoinLoan's liquidation policy is unforgiving and their instant loan service comes with a high interest rate.
There are two options for loans at CoinLoan: instant loans and the loan marketplace. Instant loans have set parameters and if you agree to those terms you can get a loan instantly. In the loan marketplace you can set your own parameters (interest rate, repayment period, etc.) and if someone on the other end of the market agrees to your terms, than you get your loan. For the loan details, we will be discussing CoinLoan's instant loans.
- Interest rate: 10%
- Monthly payment: $41 (for a €5,000 loan)
- Repayment period 1 month - 3 years
- Service fee 1% of loan
- LTV rates 5% - 70%
An important aspect of CoinLoan to note is that changing your LTV does not affect your interest rate or monthly payments. Decreasing your LTV on CoinLoan simply raises the amount of collateral you need to stake and lowers your risk of liquidation.
On CoinLoan you must agree to their Liquidation Threshold terms. The highest LTV you can obtain for a loan is 70%. If your LTV increases due to a decrease in the value of your collateral, you must either stake more collateral or pay off a portion of your loan. CoinLoan will notify users if their LTV reaches 80%. Once their LTV reaches 90%, their collateral is liquidated automatically by the system to protect lenders from losses.
CoinLoan's loan agreement also states that collateral is liquidated in the event of a default. The amount liquidated equates to your monthly payment.
In either of the cases above, you will end up owing CoinLoan for any costs associated with liquidating your own assets.
On the instant loan page, you can stake the following cryptocurrencies as collateral:
- BTC, BCH, ETH, LTC, XMR, CLT, ONT
in exchange for the following currencies:
- TUSD, USDC, PAX, USDT, EURS, as well as fiat currencies EUR and RUB.
What CoinLoan's Loans Do Well
If a borrower decides to pay off their loan in CLT, CoinLoan's in-house token, their borrowing fees are cut in half. Typical borrowing fees amount to 1% of the total loan amount, so if you are borrowing large sums, paying in CLT may save you a pretty penny.
Borrowers do not need to be restricted to the confines of CoinLoan's Instant Loans. They can explore the lending marketplace where borrowers and lender alike can agree on their own terms. A borrower can customize aspects of their loan like which currency they get paid in and which they offer collateral in. They set their interest rate and loan repayment length. They can set a range of acceptable loan amounts and if they can find a lender which agrees to all of these requisites, then the loan is ordered.
On the flip side, if you are interesting in lending, you can earn offer your own currency in this overcollateralized system. If someone accepts your parameters, then you can make some relatively risk-free passive income on your assets which would have otherwise been sitting idly.
Why You Might Want To Choose Another Service
USD Not Supported
You cannot take out a loan in CoinLoan and get paid in USD. CoinLoan has USD functionality in their loan markertplace so theoretically you should be able to receive USD, but there are no available loans which pay USD. The marketplace also seemingly accepts the pound and the Russian ruble, but neither of those fiat currencies have any available loans either. It seems like for now if you want a loan to be paid out in fiat you must accept it in euros.
High Interest Rates
CoinLoan's 10% standard interest rates on their instant loans is relatively high. This rate guarantees you can get a loan immediately, but is slightly higher than what you might find elsewhere. On the marketplace you may be able to find a lower rate, but if you want a loan instantly you may have to pay a premium through CoinLoan.
To Wrap It Up
CoinLoan offers a very flexible loan program. Their marketplace offers a level of customizability which is challenging to find elsewhere. Although CoinLoan offers a high rate, they also provide a high threshold for liquidation. Beware if you cross that threshold, as CoinLoan has the right to liquidate all of your collateral instantly and automatically.
CoinLoan Company Review
On all accounts, CoinLoan, an Estonian company, appears reputable and trustworthy, but does their lack of insurance negate the strides they've been making to bolster their own legitimacy?
CoinLoan was founded in February 2017 in a private round of funding. CoinLoan's legal name is ExFinance OÜ which is registered in Estonia, a developing tech-startup hot bed in the EU. CoinLoan founders Alex Faliushin and Max Sapelov run the company which employs approximately 11-50 people.
CoinLoan does not charge a fee to deposit or withdraw your cryptocurrency, unless you are depositing by credit card which requires a 4.2% fee. Assets are not locked up in CoinLoan's interest bearing account meaning you may terminate their service whenever you wish. If you decide to take your funds out before the first of the month (the date when interest is paid out), you will still receive the interest your earned, but it will still be paid out on the first of the month.
As with all legitimate business endeavors, customers are subject to KYC/AML policies. CoinLoan is no different. They ask for the standard information: name, email, address, photo ID. CoinLoan will also ask you for a selfie. One important aspect of CoinLoan's KYC process is that they send your information, including your biometric data and banking information, to a London based company called, Sum and Substance Limited. Sum and Substance seems reputable, but you may want to do your own research.
CoinLoan's website is sleek, refined and easy to understand. Their important legal documents are displayed prominently and they have a very informative FAQ for any questions you may have. They have representatives on standby in an instant messaging chatbox, ready to answer an questions at a moments notice. Their website even has language capabilities for German and Russian speakers, a touch seldom seen in the nascent DeFi space. All in all, their site is well-crafted which adds to the CoinLoan experience rather than detracting from it.
Security is paramount at CoinLoan. Assets are never stored in hot wallets and all transactions are performed manually by the CoinLoan team. This is of course a trade off. Lack of hot wallets means transactions cannot be instantaneous, but slight delays are a small price to pay for increased security. CoinLoan's cold wallets have never been connected to the network, and each transaction requires multiple signatures. On top of this, CoinLoan openly discusses their ten security measures which rounds out a solid list of best-in-practice solutions you should always look for in third-party custodians.
The information regarding their privacy and security policies is prominently displayed on their website. If you have a question about their services, you can expect a reply within minutes from a CoinLoan employee on their website's instant messaging app. These features, coupled with a strong business background, points to a company which is attempting to provide an honest and reliable service.
CoinLoan does not restrict their service based on geographical location. They have low minimums and high maximum account balances. Their language services are a clear attempt to include parts of the population otherwise disenfranchised by language obstacles. CoinLoan is doing a good job making their services accessible to everyone.
CoinLoan does not offer traditional insurance for its customer's assets. They explain their decision as a tradeoff with security. CoinLoan argues that some common insurance providers offer incomplete policy measures. CoinLoan also argues that insurance works well for companies lacking knowledge of security best practices. According to CoinLoan, a company who lauds its long history of security experience, this does not apply to them. Regardless of their reasoning, no insurance means more trust, or at least more centralized trust. If you decide to use CoinLoan's services, you are going to have to trust they are doing the right things with your assets.
To Wrap It Up
For many investors, ease of mind is the name of the game, especially within this DeFi space where nothing is true unless you can verify it yourself. In this regard, CoinLoan excels. We know where CoinLoan is registered, we know under which legal entity they operate and which legal policies you must agree to in order to use their services. However, with no insurance on assets, your trust is consolidated. You now must trust CoinLoan and CoinLoan alone to do the right thing with your assets. Before using CoinLoan it is important to ask yourself: how much do you value legitimacy over indemnity?