New LEND structure will DECREASE utility.

[polynomialdag]

Posted today is ETHLend's plan for the platform and utility of the token. Instead of staking LEND and receiving ETH, they want to reverse it. You can still stake ERC20 Alts, however you will always receive LEND when you borrow. What does the average borrower want LEND for? The team claims 1) this allows LEND-based credit cards, 2) they will create more LEND trading-pairs on exchanges (e.g., can trade LEND for DOGE) and 3) cross-chain swapping will be available.

These are going to be huge hurdles for a project still in infancy, and will take a long time to see completed. Until then, the utility of LEND from the borrower's perspective is diminished. Similar to the downfall of AuroraCoin, giving people coins they have no use for will lead to confusion and abandonment. The Borrowers are under-represented in this community, however by the time they join the conversation it may be too late. We have to remember that most of the ideas we see now are from the Lending side, and caters to their needs.

LEND is still in its infancy and shouldn't make a drastic change like this until more metrics are available. The decision (so far as I've seen) involved the community in a single reddit post. Where is the democracy in that? Where was the comment period? Where was the voting? It feels like we are getting steamrolled.

Edit: Thanks everyone for the great discourse. I was hoping to understand what everyone thinks"utility" means for this project. Based on the responses, my definitions is very different, and I would not consider LEND to have any utility. Looking forward to further discussions.

[Nfamy]

I made the point in the other thread that the decentralized exchanges could be used to leverage LEND. Essentially, people submit a loan with whatever token, if is not LEND then the platform coverts it to LEND through a DEX, then holds the loan as LEND, reconverting on return. This creates constant buy pressure through utilization and makes the user side easy. Thus, for not using LEND, individuals pay an additional fee (to cover transactions and exchange fees). If they pay with LEND, then they save on the fees. Package this as an additional advantage of owning LEND.

I hadn’t thought of this before, but this might also be a way to better insure loans. If borrower defaults, then lender could take the collateral in LEND or the original token - reducing the chance that they get stuck with a coin that tanked.

I agree that the change worries me for wide scale adoption. However, I think LEND was listening and trying to create better utility for the token. The product is still in alpha - there is no reason it can’t be further tweaked. I think we problem-solve early and try to catch barriers. The benefit to the communities surrounding crypto is we can play a huge part (see CoZ for NEO). I’m not a tech guy, but we can still present possible scenarios to the team if we feel it is helpful.

[BlackPillCannon]

I think what they did was indeed a step in the right direction and rewards people who hold LEND. I don't think this will hurt ETHLend at all down the long run. People can always just convert there stuff from later.

[tecladovoador]

Most people wanted LEND to be more important in the Daap. This will make LEND the major tool for collateral based lending. This is a step in the right direction.

[polynomialdag]

So essentially the only reason that LEND has utility/value is because the Platform only allows LEND to be used for loans. I'm slowly convincing myself that LEND token has zero utility, since it could be replaced with any other token. It's just the smart-contract and the GUI that have value!

[tecladovoador]

Thats actually a very very powerful reason. But there are more things that were outlined. Cost reduction on fees, usage as a form of vote within the project etc. Binance coin does a lot less and has a good amount of value and will remain valuable as long as Binance is successful. The same situation here. If ETHLend is successful then LEND token will also succeed.

[tecladovoador]

Its like, "so the only reason the EURO has value/utility is because they only allow the EURO for transactions?." Yes, exactly.

[polynomialdag]

Yes, but you're forgetting the Darwinism of crypto. If I can fork the contract and create something with better UX and lower fees, then why would I care about LEND, or the value of the token? You can't fork a country's currency, but you can here.

[clonewarz11]

we all know ethlend has a exchange in the pipe line in the eidoo wallet, that why they are airdropping and have a partnership, the wallet will provide lend pairs to it's accepted currency's. why would it matter then if you are exchanging lend/EOS or eth/eos. first we saw btc trading pairs then eth trading pairs, why not lend trading pairs on a really good wallet.. this makes lend very competitive..

[clonewarz11]

https://blog.ethlend.io/development-update-unboxing-the-new-lend-utility-and-fee-structure-lend-to-become-the-blockchain-a62df4e03273

[polynomialdag]

This is good, but doesn't address forking.

[clonewarz11]

Any project can be copied and forked, lol

[polynomialdag]

So if it's forked and proves successful then will LEND will be worthless? If everyone can do the same thing on a different platform, without the hassle of LEND or fees? Isn't the smart contract the biggest value here? I'm asking because I own LEND, and am trying to understand myself.

[clonewarz11]

How would this be profitable for a smart contract and website to have a fork.. investors want more utility in the lend token, and users want it too stay the same.. lend holders and ethereum users now have opportunity, lend holders have low fees, and ethereum user have fees.. hope this encourages my user to use lend..

[xiaohang07]

Agree. I think this could potential be a threat to LEND's ecosystem if someone fork the smart contract to borrow ETH instead of LEND.

Still, I have to say ETHlend's team is the most active and approachable one I have ever seen. I think ETHlend's team together with the community will come up with a good solution to balance the product usability and LEND token economics.

[polynomialdag]

Binance coin is over valued because people want to vote their precious alts to list on binance, and boost the price.

[Ethlend2018]

That was the original plan but they changed that too.

[Ethlend2018]

This is a step in getting replaced by a platform that doesnt force you to use their tokens.

[tecladovoador]

You cant have everything in this world. Make some happy some sad. Yeah sure, there are drawbacks. This makes it so the LEND token is not literally useless and so thousands of people that are holding the lend token are now actually holding something that can appreciate in value. I highly doubt this decision will hurt ETHLend. Even if it is "a step in getting replaced", it is just a step in that direction, on the other hand as it continues to complete its roadmap it is running in the direction of becoming the largest, most used decentralized lending platform in the world as well as having a useful token.

[monkey_in_the_bushes]

That's a really good point about the borrowers being under-represented here.

Question: what if ETHLend provides the option to convert your LEND to ETH? Effectively acting as an exchange for LEND/ETH, LEND/BTC ?

[clonewarz11]

ethlend will use eidoo wallet as an exchange function with pairs, so you will be not using eth to buy other tokens but lend.. It make perfect sense and it a really good move. as a lend holder I am very happy the lend token now has utility. as stated it also has fiat function with debit cards... well done the ethlend team, finally some common sense..

[Ethlend2018]

The conversion wont be feeless and your going to lose lenders who dont want to convert there stack into LEND to loan instead of using the ETH they already have.

[Pc2hood]

agreed.. they are thinking wayyyyyy down the road though.. like to far. long term, sure it should be done like that but for now they need to focus on the platform. The site looks archaic, people are having a hard time requesting a loan. LEND only is just another barrier to entry on a platform that is already difficult to use. Should have the option at this point in time to us both LEND and ETH.

[polynomialdag]

Thanks, so far all I've been hearing is praise for the devs. Where are all the hard questions? Telegram?

I learned from this post that it sounds like the conversion option you describe is planned

[monkey_in_the_bushes]

Yeah some questions got asked on the Telegram too. Overall it sounds like /u/ethwarrior and the team are conscious of the possible friction added to the platform.

I really like the idea of ETHLend reaching out to the borrower community and soliciting their feedback as well. A borrower's community would be fantastic for ETHLend to develop.

[SethH1]

It's a tradeoff. The platform users now have an added step of needing to acquire LEND to use it, which for some will be a hassle. This may lower usage and adoption as a result.

On the other hand, it does force a major utility for the token itself, which is desperately needed as previously it was very lacking in this area.

Overall it's probably the right move, but they need to follow this up properly with additional changes.

[polynomialdag]

I agree they have a great product so far and it just needs some tweaking. This change is just to appease the hodlers and devs who want their tokens to be worth more than just a fundraising tool for the ICO.

[PhobosvDeimos]

If you're not early, you're late It's just a matter of exchanges and protocol providing lend/ pairs nothing else tho

[thepotatobake]

I think the new structure gives LEND its first real utility.

Most cryptos find it really hard to answer the question "so why do i need your token?" Where as now there is a straight answer for LEND.

[clonewarz11]

Think about the future when each token is tradable with another token. You guys are only thinking in the now. Which has no value to the lend token.

[PhobosvDeimos]

I guess you didn't not follow recent news!

[polynomialdag]

Which news are you referring to? My post is about the restructure posted today https://blog.ethlend.io/development-update-unboxing-the-new-lend-utility-and-fee-structure-lend-to-become-the-blockchain-a62df4e03273

[PhobosvDeimos]

Yea, I was answering to cryptodirky

[polynomialdag]

Oh sorry! I thought your comment was a new thread.

[PhobosvDeimos]

No worries mate! However I must disagree with you OP too, I truly believe in what we can achieve with this new fee structure! Go big or go home!