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In this article, we shall be talking about the no1 platform that is currently running lending operators. We shall be looking at how it works followed by the usefulness of ETHLend by borrowers, we shall also be looking at how ETHLend creates trust and some other interesting information about ETHLend. So, without wasting much of our time let’s get down business. Firstly, let's see how ETHLend works.

<div><h3>HOW ETHLEND WORKS?</h3></div>

The semi-anonymity of the Ethereum technology makes it quite difficult to determine if a borrower has an encouraging payment background. By utilizing a structure of reputation ETHLend tends to eliminate this ambiguity. Lenders should have no fear because every Ethereum address has been attached with a reputation score that a user is eligible to borrow so that lenders are reassured. This reputation system is functional on the Credit Token (CRE), it's a token that is only utilized on the ETHLend internal block network, there will be more details below.

ETHLend is a secured lending platform, the borrower has to upload some form of collateral, and this collateral could be in form of any ERC-20 tokens or Ethereum Name Service (ENS) domains that are owned by them: the ENS domains are short with the ETH expansion that can be used by an Ethereum wallet rather than the difficult and long wallet address. In other words, ETHLend permits users to borrow ETH by using ERC20 tokens as collateral. ETHLend also allows users to utilize the Ethereum Domain Names (EDN) as collateral instead of digital coins.

With an intention to democratize global lending markets, ETHLend launched its initial coin offering in November 2017, it was successful as they raised over $16 million. ETHLend is known to create a relationship between borrowers and lenders from around the world.

<div><h3>HOW BORROWER CAN UTILIZE ETHLEND:</h3></div>

Increase the leverage of individuals that engage in margin trading.

When a borrower applies and submits a loan request, this process automatically creates a smart contract on the Ethereum blockchain. The borrower then enters his/her information into the smart contract, and this data includes the amount of the loan, interest rate, the terms and conditions as well as the volume and digital address of the exact tokens to be uploaded as collateral.

Once all the borrower and lender have finalized their details, the digital tokens to be used in the form of security are transferred to the smart contract. Lenders can then flip through the accessible loan application on the ETHLend website and make a choice of the borrower that meets their lending criteria best.

If the borrower defaults on the loan, the tokens that the individual used as collateral will be allocated to the lender.

<div><h3>HOW ETHLEND CREATE TRUST?</h3></div>

It has been proven that a Reputation Based Lending service is established to create trust between lenders and borrowers and using the CRE token as a unit of trust. Furthermore, this Decentralized Credit Rating (DCR) builds a credit profile of the borrower making use of other blockchains, this data will be made accessible to other blockchain systems. The system also uses some efficient off-blockchain approach to access data and also build a credit profile of the borrower. For better understanding, a credit profile is also known as your credit report that can show whether you’re approved for loans, and the terms attached. So, in other words, a credit report shows your eligibility to acquire a loan. This system helps assure the lender.

<div><h3>HOW ETHLEND GATHERS DATA?</h3></div>

ETHLend community has suggested some amazing solutions to gathering data. One of which is the inauguration of oracles, this means in Ethereum terms that real-world information is received from outside the blockchain (off-blockchain) and is connected to some entities on the blockchain. The reason for this operation is to carry out credit checks on potential borrowers.

The next suggestion was to utilize Social media to verify their identity and to profile the borrower. Centralized data can be used to enforce a debt by getting a person’s address. This also has benefits for the borrower who can get better lending rates.

<div><h3>ABOUT LEND TOKENS</h3></div>

ETHLend’s LEND token is an ERC-20 token that was sold during the ICO and pre-sale offering. The LEND token has very important functions on the DAPP.

**Discount Fees**

Beneficiaries of LEND tokens will be given a price reduction of 25% on platform charges, which when compared to paying with ETH it's better. It is true that the LEND tokens can be sold and bought on exchanges, but the basic use for LEND is to generate a discount rate for users when paying for ETHLend DAPP deployment charges.

<div><h3>ABOUT CREDIT TOKENS (CRE) AND HOW IT WORKS.</h3></div>

Credit Tokens are an ECR-20 token that will be exclusively used in ETHLend to represent a borrower’s reputation. These credit tokens cannot be traded or even transferred to another address. According to their volume of Credit Tokens attached with an account of a user, the more trustworthy the user’s account is and is eligible to lend.

ETHLend will help manage the reputation of a borrower reputations by issuing Credit Tokens to borrowers who successfully pay back loans without creating problems. For every 1 ETH that has been paid back by a user, 0.1 CRE will be received.  Likewise, ETHLend will “burn” Credit Tokens away from accounts that refuse to pay back loans. A user that acquired a high amount of CRE will be able to access loans that another user with a low volume of CRE can’t. Users with a higher volume of CRE will be rewarded with lower interest rates. 

The main goal of blockchain and cryptocurrency technology is creating new innovative ideas that will help them achieve their goal main goal, and also bank the unbanked, also note that users are allowed to use their Bitcoin as collateral to borrow funds. In addition, the ETHLend DAPP has an encouraging position on the [state of the DAPPS. ](https://www.stateofthedapps.com/dapps/ethlend)

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<center>**For more information kindly visit the following links;**  
[Press release A](https://medium.com/aave/ethlend-baiji-release-has-arrived-on-the-mainnet-9efb6236aa1b)</center><center>[Press release B](https://www.bizjournals.com/twincities/prnewswire/press_releases/Minnesota/2019/02/06/enUK201901295900B?ana=prnews)</center><center>[Application](https://app.ethlend.io/?utm_source=StateOfTheDApps)</center><center>[Project Website](https://ethlend.io/)</center>