Why 8lends’ model stands out in a volatile market

8lends redefines crypto lending, balancing stability and innovation amid the market’s infamous volatility and high risks.

The cryptocurrency market is infamous for its volatility. From record-breaking surges to dramatic crashes, investors and borrowers alike have learned that navigating the crypto world requires both strategy and resilience. While the potential for gains is high, the risks—especially during market downturns—are equally significant.

Yet amid this volatility, some platforms are rethinking the rules. By combining stability and innovation, 8lends offers a unique approach to lending in the crypto ecosystem. But before we delve into how 8lends safeguards its users, let’s take a closer look at the unpredictable nature of the crypto market.

A history of crypto market crashes

1. The 2018 crypto winter
After the meteoric rise of Bitcoin to nearly $20,000 in December 2017, the market experienced a prolonged crash in 2018, wiping out nearly 80% of its value. The collapse of Initial Coin Offerings (ICOs), coupled with regulatory crackdowns, shook investor confidence and led to a significant market downturn.

2. The May 2021 sell-off
In May 2021, the crypto market lost over $1 trillion in market value within weeks. The crash was triggered by a combination of factors:

• Tesla’s announcement that it would no longer accept Bitcoin due to environmental concerns.
• Regulatory tightening in China, including a crackdown on mining operations.
• Over-leveraged trading, which led to forced liquidations during price declines.

3. The FTX collapse of 2022
Perhaps the most infamous recent crash was the collapse of the FTX exchange in November 2022. The bankruptcy of what was once a trusted platform highlighted the risks of centralized financial entities in the crypto space. The ripple effects caused widespread sell-offs, further eroding trust in the market.

Why crypto volatility creates unique risks

While crypto’s potential is undeniable, its extreme volatility creates challenges, particularly in the world of lending.

For borrowers:

• Collateral in crypto can lose value rapidly during a market downturn. Borrowers are often forced to provide additional collateral or face liquidation.

For investors:

• During crashes, the value of crypto collateral may no longer cover the loan amount, leaving lenders exposed to significant losses.

These risks make traditional crypto-backed lending inherently unstable, especially during market corrections.

The 8lends solution: Stability in a volatile world

8lends was designed with these risks in mind, offering a model that minimizes exposure to crypto volatility while maintaining the transparency and efficiency of blockchain. Here’s how 8lends ensures stability for both borrowers and investors:

1. Real-world collateral

Unlike traditional DeFi platforms that rely solely on crypto as collateral, 8lends allows borrowers to secure loans with tangible, real-world assets such as:

• Equipment: Machinery or tools pledged as collateral.
• Personal guarantees: Borrowers’ personal commitments for repayment.
• Real estate: Properties used as high-value collateral.
• Stocks: Equity holdings securing loans.
• Company assets: Tangible assets like vehicles or machinery.
• Stock commodities: Raw materials or inventory as collateral.

Why This Matters
These assets are far less volatile than cryptocurrencies, ensuring that the value of the collateral remains stable even during market downturns. This provides a safety net for both borrowers and investors.

2. Risk mitigation through insurance

8lends goes a step further by implementing an insurance protocol to protect investor funds. Here’s how it works:

• A small percentage of each investment is allocated to a collective insurance pool.
• If a borrower defaults, the insurance pool compensates investors, reducing their financial exposure.

Why this matters
This added layer of security ensures that investors are protected even in the unlikely event of a default, creating a safer lending environment.

3. Blockchain transparency with Swiss reliability

8lends combines the trust of Swiss financial regulations with the transparency of blockchain technology.

• Swiss compliance: The platform operates under strict Swiss anti-money laundering (AML) regulations, ensuring that all financial intermediaries are verified and monitored.
• Blockchain transactions: Every transaction is recorded on an immutable blockchain ledger, providing real-time visibility into fund flows and loan repayments.

Why this matters
By adhering to Swiss regulatory standards while leveraging blockchain, 8lends provides a secure and transparent platform that investors can trust, even during turbulent markets.

4. Diversified borrower base

8lends focuses on funding businesses with real-world operations rather than speculative crypto projects. Borrowers are thoroughly vetted using a rigorous 40-point evaluation system that assesses financial health, repayment capacity, and asset quality.

Why this matters
A diversified borrower base anchored in real-world businesses reduces overall platform risk and ensures steady returns for investors, even during crypto market instability.

Why 8lends stands out

During crypto crashes, many platforms struggle to maintain stability. 8lends, however, has built a model that thrives in volatile conditions by addressing the root causes of risk:

• Stable collateral: Real-world assets replace volatile crypto as collateral.
• Investor protections: Insurance protocols shield lenders from losses.
• Transparency: Blockchain ensures trust and accountability.
• Regulatory compliance: Swiss standards provide a framework for secure operations.

These features make 8lends a safer choice for both seasoned and novice investors looking to navigate the world of DeFi lending without undue exposure to market volatility.

The takeaway

The crypto market’s volatility doesn’t have to mean chaos. Platforms like 8lends are proving that with the right safeguards, decentralized finance can offer stability and security even during the most challenging times.

By anchoring loans to real-world collateral, implementing robust insurance protocols, and operating under trusted Swiss regulations, 8lends is redefining what it means to lend and invest in a volatile market.

Ready to experience a smarter, safer way to invest? Join the 8lends whitelist today and discover how we’re building a stable foundation for the future of DeFi lending.