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ICX holders now have another way to make their tokens work for them.

Financial services platform VELIC will launch its new Loan M program on Friday, the world’s first ICX collateralized loans.

With low interest, instantly approved ICX collateralized USDT loans, holders will now be able to use their tokens to buy other coins, invest in other projects or finance their own operations while maintaining ownership over their coins.

Want to buy Bitcoin? Need cash to fund your DApp development? Now you can without having to sell your ICX. (Purchase of Lambos not encouraged.)

Low cost, instant loans

Loan M’s loan structure is simple.

Using your ICX as collateral, you can take out three-month loans at an interest rate of just 4.5% per annum (or as low as 3.8% if you promote the program to others; see below for more details). The loans are paid out in USDT, the world’s most popular stablecoin. Loans are approved and deposited instantly, allowing you to trade immediately.

To put that 4.5% interest rate in perspective, Unchain Capital — a popular cryptocurrency loan provider — offers interest rates between 8% and 14% per annum for loans ranging between 3 months and 60 months. Another popular provider, BlockFi, has interest rates that start at 8% per annum. Both of these providers also charge loan origination fees between 1–2%; VELIC doesn’t have any such extra fee.

VELIC plans to support more altcoins later, as well as add an option to receive loans in USDC, another popular USD-pegged stablecoin (with a very similar name to USDT). Though the loans are not fiat, stablecoins are used widely throughout the crypto world.

VELIC has set the interest rate low to place as little a burden on ICX holders as possible and encourage them to use the service. This it can do because the platform boasts a professional asset management team with a collective 70 years of experience in the financial world. Like any financial institution, VELIC monitors the market and manages risk.

“If you’re an individual ICX holder, all you can do is hold your ICX,” says a VELIC official. “By using ICX as collateral, the individual maintains ownership while investing in other coins or using loans to finance other things in the real world economy.” 

The official cites the example of a DApp developer: “In the case of a DApp, they may get a lot of ICX through their ICOs, but they need to fund operating costs, and to do this they have to sell their ICX,” explains the official. “But by leaving their ICX with us as collateral, they can fund their operating costs using the loan while retaining ownership of their ICX and preserving their upside potential.”

VELIC may adjust some of the program’s terms and conditions depending on the community reaction.

Not just an exchange, but a comprehensive financial institution

Loan M contributes to the ICON ecosystem by providing ICX holders with Bitcoin-like opportunities to use financial services and invest.

The launch of Loan M comes not long after VELIC’s launch of Loan X, a similar loan program using Bitcoin as collateral with interest rates as low as 2%. In contrast, Loan M offers altcoin-collateralized 4.5% APR loans which serve to bolster the ICON community.

This new offering — which marks the first time an ICX-collateralized loan has ever been issued — comes at a time when VELIC is leading the candidacy race to become one of ICON’s top 22 P-Reps in the platform’s ongoing decentralization process. The company is positioning themselves very strongly to become the financial backbone of the ICON ecosystem.

VELIC is perhaps best known within the ICON community for its cryptocurrency exchange, which is not only built on ICON and integrates seamlessly with ICX, but also offers to list the tokens of other ICON DApps such as weBloc’s utility token WOK.

The Loan M and Loan X programs, however, demonstrate the platform’s role as a comprehensive financial institution offering — or at least aspiring to offer — all the services and performing all the functions of traditional banks.

Speaking on the logistics of offering a financial service such as Loan M, the VELIC official said, “Managing collateral risk on altcoins is no easy feat, which is why most altcoins, including ICX, are not usually accepted as collateral. Loan M is one of VELIC’s unique contributions to the ICON ecosystem.”

In addition to the loan programs, VELIC’s arsenal of financial services includes or will soon include so-called “staving” that combine savings and staking, asset management and advanced custody and key storage.

Indeed, the platform aims to become the financial backbone of the ICON ecosystem by providing financial services to ICX holders, generating transactions on the network, providing DApp developers a space in which to conduct IEOs and IAOs, listing DApp tokens and providing projects with funding support.

Loan M Referral Rewards

VELIC is hosting a promotional event to mark the launch of the Loan M program.

Share the referral code or the referral link with your friends, and earn rewards together.

You can earn a 0.3% annualized bonus whenever someone uses your referral link to take out a loan under the Loan M program for the first — and only the first — time.

The people you refer, on the other hand, earn a 0.7% annualized bonus on the money received for the very first Loan M loan they take out. This equates to an effective APR of 3.8% for the first borrowing under the Loan M program.

As an additional bonus, Loan M interest rates are lowered to only 3.8% for the first loan you take out with a referral code. Rewards are distributed the next day.

This article was sponsored by VELIC. The Iconist accepts paid advertising requests. Such advertisements will be identified as paid advertisements.