Flash Loans with XIO

Name of Project

Flash Loans

Ticker for Token

FLOAN

1) In one sentences or less, describe your token. This isn’t the time to get wordy, just to the point!

Ability to get overcollateralised loans without paying interest, ever.

2) Do you have a video to introduce yourself or explain the token? Upload it here and share the link here. (Not required)

None, sorry

3) Do you have a logo for your token? If so, upload it here. (Not required)

None, sorry

4) How does your token work? Be as detailed as possible

The token is designed to be paired with another token (likely a stablecoin or BTC/ETH).
The goal is to utilise the initial yield generated by the flashstaking protocol to offset the interest repayments on the loan. The end goal being a timed overcollateralised loan that requires no interest payments.
Essentially, the FLOAN token initial stake yield would cover the interest payment of the loan, with the FLOAN tokens being returned to the borrower after the staking period is over, rather than being burned or sold.

This token, combined with the underlaying stablecoin collateral, would then allow a loan to be provided to the borrower with no need of repayment fees or interest, only requiring the loan to be repaid after the set lending term. The amount of FLOAN required for the size of the loan would need to be calculated from a separate pricing indicator that is determined by the amount of the collateral, collateral token, and market volatility.
Also, should the borrower desire to pay the loan off early, that would unlock the collateral but the FLOAN does not need to be affected in any way (though an early withdraw may be possible due to burning).

For the sake of the example, let us assume the value of FLOAN is $1 and the APY for staking it is 10%.

Example scenario - Borrower want to borrow $1000 in BTC for 1 year
After assessing the risk and relevant fees, a number of options are provided to the borrower (interest is not indicative of what the rates should be):

  1. Offer $2000 in USDT as collateral and stake 500 FLOAN for 1 year (providing $50 to cover interest)
  2. Offer $2000 in USDT as collateral and stake 1000 FLOAN for 6 months (providing $50 to cover interest)
  3. Offer $4000 in USDT as collateral and stake 250 FLOAN for 1 year (providing $25 to cover interest)
  4. Offer $4000 in USDT as collateral and stake 125 FLOAN for 2 years (providing $25 to cover interest)
  5. etc…

The FLOAN tokens would then be returned to the borrower once that staking term was up.
Then, after 1 year the loan amount would need to be returned to the initial wallet that the loan was made from and the collateral would be unlocked.

5) What problem is your token aiming to solve? How will this positively impact the crypto industry?

  • Reduces complexity of the loan process for the borrower by not requiring interest payments as that is generated upfront from the FLOAN token.
  • An interest free loan would enable those who require immediate money to retain their assets, and still be able to pay down debts or make other necessary purchases without needing to worry about repayments.
  • This would also be of great interest to investors who are currently using similar lending products.
  • Instead of spending fiat/crypto or burning a proprietary token to pay fees, the entirety of the staked FLOAN asset is returned after the staking period.

6) What was the inspiration of this token? How did you think of it?

Overcollateralised loans have been rising in popularity in the crypto market, which allows for very low interest rates due to the very low risk. Providing loans for no interest seems to be the logical next step.
Loans always seem to be complicated, but they are a product that can be used to great effect to make/keep wealth by those that understand and utilise them. Therefore, making the process as easy and simple as possible can only be beneficial to increasing wealth among people in crypto.

7) Are there any projects out there doing something similar?

Loans are a well-known product, and there are a number of companies and tokens in crypto that are offering them.

For example, Celsius (CEL token) can be used to pay fees at reduced rates and AAVE is a lending token that offers a more crowdsourced solution. They still charge fees though.

8) What phase is the token in? Explore vs. Build vs. Launch vs. Scale. (If there has been no coding yet, your token is in the explore phase)

Explore Phase

9) Will this token be inflationary, deflationary, fixed, or dynamic token supply?

Inflationary

10) How long do you think it would take to build a minimal viable token?

Unsure, probably 1 - 2 months.

However, additional work on integration would be needed to create partnerships with wallets.
Also, (a smaller) additional amount of time would be needed to build a tool to understand the various lending rates of the stablecoins (or other tokens offered as part of a loan).

11) What skills do you have that would help bring this token to reality? (ex: Marketing, Development, Branding, etc)

Not too much unfortunately, happy to further discuss/brainstorm on the token.

12) Are there any inherent weaknesses or obstacles to building this token? Any items you still need to figure out?

Would be necessary to be able to integrate/partner with wallets to hold the collateral.
Likely start with a limited rollout, with only a certain amount of loans available per month, growing as the available capital increases.
May also be valuable to partner with someone who has access to capital and would like to provide no interest loans to their customers.

If you want to share your Twitter/Telegram handle here for people to reach out and discuss this idea with you, post them below.

Not too involved in social media, apologies.

This is where you can put anything you want that was not directly asked above! Anything and everything related to your token idea can go here. Any files, links, info, etc

This would likely require more effort beyond the creation of just the coin, due to the need to create partnerships with wallets and creating a tracking method to monitor appropriate lending rates.
However, this token should be able to provide a cutting edge service to its holders in a competitive financial market.

1 Like

Why would you make this inflationary?
That would bring a risk to have a devalued $FLOAN after your lock for the credit is over, right?

Thanks for the comment.

The rationale behind the Inflationary model was to try and create a token that starts with a lower initial supply to allow the vast majority to be highly circulated or used, then to introduce a ~2-5% inflation rate per year.
I believe this would enable the price of the token to achieve stability early on, be seen as a highly traded asset relative to market cap, yet still appreciate in its value. While there would be some $$ loss due to the inflation over time, this should be minimal given the low rate of inflation.
This also enables the token to be burned to an excessive degree by early unstaking of the token and not need future stakers to start using 0.0001 FLOAN for $100 (should the project take off).

That being said, really not too hard set on inflationary, as a deflationary model should also work and is more standard to these types of tokens :slight_smile: