Posted 3 weeks ago | by Catoshi Nakamoto

On Friday, we interviewed Smartcredit’s CEO Martin Ploom and Co-Founder and CTO Tarmo Ploom. During our discussion, SmartCredit discussed various different advancements soon coming to its platform and partnerships. SmartCredit seeks to give its users CHOICE when interacting in DEFI offering real fixed-income rates. The team also gave out 100 SmartCredit rewards to the best questions asked during the AMA and spent additional time answering tons of user-submitted questions.

The following is a full transcript of the AMA with SmartCredit.

The Cat ? [BitboyCrypto], [23.04.21 13:04]
Alright guys we are getting ready to start. I have muted the channel and only I and our guest Smartcredit can speak until the second section of our AMA.

Martin Ploom | SmartCredit.io, [23.04.21 13:05]
Hello All, Let’s have a great AMA!

Tarmo, [23.04.21 13:05]
Hello!

The Cat ? [BitboyCrypto], [23.04.21 13:05]
How are you guys doing today? @Martinikus @TarmoPloom please introduce yourselves and tell us a bit about Smartcredit and how the project became to be?

Tarmo, [23.04.21 13:08]
Hi, I am Tarmo, Co-Founder and CTO of SmartCredit. Before starting SmartCredit I was Chief-Architect of Finnova (it is the largest Swiss Banking Platform). And before that I was ten years Vice Precident in Credit Suisse.

Martin Ploom | SmartCredit.io, [23.04.21 13:08]
Hello All, I’m Co-Founder and CEO. Of SmartCredit. I spent before 10 years in Credit.-Suisse in Zurich and before this many years in startups, where I launched 4 successful products with 250’000+ users

Martin Ploom | SmartCredit.io, [23.04.21 13:09]
We were early in blockchain. And we know the credit systems inside out

Martin Ploom | SmartCredit.io, [23.04.21 13:09]
So, we said the DeFi system (what we called that time Decentral Autonomous Bank) will need a fixed-income

Martin Ploom | SmartCredit.io, [23.04.21 13:09]
But not fixed-income like Money-Market-Funds (Aave, Compound), but real fixed-income

Martin Ploom | SmartCredit.io, [23.04.21 13:10]
And that’s the key focus of SmartCredit – fixed-income for the crypto sphere, the fixed-term-loans, the fixed-interest-loans and DeFi Fixed-Income Funds

Martin Ploom | SmartCredit.io, [23.04.21 13:11]
And as my brother and I are CFA’s (Chartered Financial Analysts), then we have quite a know how from the traditional finance, which we are transferring into the DeFi sector

Martin Ploom | SmartCredit.io, [23.04.21 13:11]
Let’s think on the DeFi – we have today the Money-Market-Funds

Martin Ploom | SmartCredit.io, [23.04.21 13:12]
But Money-Market-Funds are fluctuating interest rate and variable term. DeFi does not have the Fixed-Income-Funds with the fixed-interest rate and fixed-term loans.

Martin Ploom | SmartCredit.io, [23.04.21 13:13]
In the traditional economy the Fixed-Income-Funds are 10x of the Money-Market-Funds.

In DeFi they are 0x of the Money-Market-Funds ==> because they are missing. And that’s what we are introducing.

WatchDog Robot, [23.04.21 13:14]
Admins list has been reloaded

The Cat ? [BitboyCrypto], [23.04.21 13:14]
Sorry about that you guys should be able to post links now.

Martin Ploom | SmartCredit.io, [23.04.21 13:14]
No problemo!

Martin Ploom | SmartCredit.io, [23.04.21 13:15]
So, our project is SmartCredit.io!

Martin Ploom | SmartCredit.io, [23.04.21 13:15]
Let’s move on with the questions

Martin Ploom | SmartCredit.io, [23.04.21 13:16]
Let me add about the fluctuating interest rates, like they are in the Money Market Funds

The Cat ? [BitboyCrypto], [23.04.21 13:16]
I think that both of your backgrounds is what makes Smartcredit a bluechip DEFI gem. A lot of people are trying to build DEFI applications but both your backgrounds in traditional finance really makes the project stand out. Can you tell me a bit more about the project goal and what you mean by Real Fixed Income?

Martin Ploom | SmartCredit.io, [23.04.21 13:17]
Our goal is to bring the elements of traditional finance, which are missing in the DeFi into the DeFi

Martin Ploom | SmartCredit.io, [23.04.21 13:17]
Let’s think borrowing and lending

Martin Ploom | SmartCredit.io, [23.04.21 13:17]
Today the DeFi Borrowing is with the Money-Market-Funds – it’s absolute flexibility for both the borrowers and lenders

Martin Ploom | SmartCredit.io, [23.04.21 13:18]
But let’s think – perhaps borrowers and lenders prefer stability to the flexibility. Perhaps they prefer known outcome instead of the fluctuating interest rates

Martin Ploom | SmartCredit.io, [23.04.21 13:18]
That’s why in the traditional finance there is much more fixed-term, fixed-interest-rate lending/borrowing than in DeFi – both sides prefer the stability instead of the absolute flexibility

Martin Ploom | SmartCredit.io, [23.04.21 13:19]
What we are adding are DeFi Fixed Income Funds

The Cat ? [BitboyCrypto], [23.04.21 13:19]
What is the benefit of fixed rate as opposed to a fluctuating rate?

Martin Ploom | SmartCredit.io, [23.04.21 13:19]
The lenders can define their own personal FIF’s

Martin Ploom | SmartCredit.io, [23.04.21 13:19]
[In reply to The Cat ? [BitboyCrypto]]
Very good question

Martin Ploom | SmartCredit.io, [23.04.21 13:19]
Let’s look on the fluctuating rates

Martin Ploom | SmartCredit.io, [23.04.21 13:20]
This is the chart from the loanscan:

Martin Ploom | SmartCredit.io, [23.04.21 13:20]
These are the fluctuating rates for the USDC in the Compound, dyDX and Aave

Martin Ploom | SmartCredit.io, [23.04.21 13:20]
Well, the borrower doesn’t know how much he needs to pay when he borrows

Martin Ploom | SmartCredit.io, [23.04.21 13:20]
[ Photo ]

Martin Ploom | SmartCredit.io, [23.04.21 13:20]
The lender doesn’t know how much he will earn when he lends funds

Martin Ploom | SmartCredit.io, [23.04.21 13:21]
The interest rate can benefit either borrower OR lender. It’s like a bet.

Martin Ploom | SmartCredit.io, [23.04.21 13:21]
Well, we offer the alternative

Martin Ploom | SmartCredit.io, [23.04.21 13:21]
The borrowers and lenders fix the interest rate

Martin Ploom | SmartCredit.io, [23.04.21 13:21]
The have the stability instead of un-stability

Martin Ploom | SmartCredit.io, [23.04.21 13:21]
They have less flexibility

Martin Ploom | SmartCredit.io, [23.04.21 13:22]
But like in the traditional economy – people prefer stability to the flexibility

Martin Ploom | SmartCredit.io, [23.04.21 13:22]
That’s why there is so high demand for the Fixed-Income-funds in the traditional economy

The Cat ? [BitboyCrypto], [23.04.21 13:22]
So what are Smartcredit’s rates?

Martin Ploom | SmartCredit.io, [23.04.21 13:23]
So, back to your question:
– Fixed rates allows the borrowers and lenders to implement predictable strategies

Martin Ploom | SmartCredit.io, [23.04.21 13:23]
[In reply to The Cat ? [BitboyCrypto]]
The rates depend from multiple parameters:
– the loan term – longer loan has higher rates
– the credit score of the borrower – the higher score means less interest (and vice versa)

Martin Ploom | SmartCredit.io, [23.04.21 13:24]
We have internal yield curves for the USDT, DAI, USDC and ETH

Martin Ploom | SmartCredit.io, [23.04.21 13:24]
The rate for the borrower is “YieldCurve(LoanTerm) + Loss Provision + Platform Fee”

Martin Ploom | SmartCredit.io, [23.04.21 13:24]
The rate for the lender is “YieldCurve(Loan Term)”

Martin Ploom | SmartCredit.io, [23.04.21 13:25]
The platform receives the Loss Provision Fee, which depends from the crypto credit score of the borrower

Martin Ploom | SmartCredit.io, [23.04.21 13:25]
And if things are not working so as they should, then the Loss Provision Fund jumps in

The Cat ? [BitboyCrypto], [23.04.21 13:25]
So even though there are fixed rates you offer many different options in the form of monthly vesting periods for loans?

Martin Ploom | SmartCredit.io, [23.04.21 13:25]
Yes

Martin Ploom | SmartCredit.io, [23.04.21 13:25]
We have the interest rate curve / yield curve

Martin Ploom | SmartCredit.io, [23.04.21 13:26]
And this defines what is the rate for which asset for which term

The Cat ? [BitboyCrypto], [23.04.21 13:26]
Very interesting

Martin Ploom | SmartCredit.io, [23.04.21 13:26]
And on the top is the Loss Provision Fee, which covers the risk

Martin Ploom | SmartCredit.io, [23.04.21 13:26]
The borrower’s can use the loan calculator

Martin Ploom | SmartCredit.io, [23.04.21 13:26]
They can calculate their loan terms, their collaterals

Martin Ploom | SmartCredit.io, [23.04.21 13:27]
And when they have done the calculations, then they can submit the Loan request

Martin Ploom | SmartCredit.io, [23.04.21 13:27]
Which will then be filled by the FIF’s or active lenders

The Cat ? [BitboyCrypto], [23.04.21 13:27]
Does that prevent impermanent loss?

Martin Ploom | SmartCredit.io, [23.04.21 13:27]
We will not have it

Martin Ploom | SmartCredit.io, [23.04.21 13:28]
We have the internal interest rate curves, and the market is based on the internal interest rate curves

The Cat ? [BitboyCrypto], [23.04.21 13:28]
So no risk of impermanent loss is that correct?

Martin Ploom | SmartCredit.io, [23.04.21 13:28]
Correct

The Cat ? [BitboyCrypto], [23.04.21 13:28]
[ ? Sticker ]

The Cat ? [BitboyCrypto], [23.04.21 13:28]
Beautiful

Martin Ploom | SmartCredit.io, [23.04.21 13:28]
That’s good old plain vanilla fixed-income

Martin Ploom | SmartCredit.io, [23.04.21 13:29]
The lenders will earn fixed-interest-rates on the collateralized loans

The Cat ? [BitboyCrypto], [23.04.21 13:29]
[In reply to Martin Ploom | SmartCredit.io]
For our audience you keep using that acronym term FIF’s what does it stand for?

Martin Ploom | SmartCredit.io, [23.04.21 13:29]
There is no financial engineering. Just borrow / lend

Martin Ploom | SmartCredit.io, [23.04.21 13:29]
[In reply to The Cat ? [BitboyCrypto]]
FIF == Fixed Income Fund

The Cat ? [BitboyCrypto], [23.04.21 13:29]
All built on the blockchain

Martin Ploom | SmartCredit.io, [23.04.21 13:29]
Yes, every lender can create multiple FIF’s

Martin Ploom | SmartCredit.io, [23.04.21 13:30]
They can implement different strategies

Martin Ploom | SmartCredit.io, [23.04.21 13:30]
Some prefer more short term (less interest)

Martin Ploom | SmartCredit.io, [23.04.21 13:30]
Some prefer more long term (more interest)

Martin Ploom | SmartCredit.io, [23.04.21 13:30]
The lenders will have CHOICE

Martin Ploom | SmartCredit.io, [23.04.21 13:30]
They can say – they want to put everything into the 0-10 days duration bucket

The Cat ? [BitboyCrypto], [23.04.21 13:30]
What are some of the advantages it gives you to build such a platform on the blockchain? How does blockchain revolutionize traditional finance with no middle man in DEFI?

Martin Ploom | SmartCredit.io, [23.04.21 13:31]
Let’s think what the banks are doing:
1. They control your assets
2. They offer you services on the assets which they control

This is a monopoly

Martin Ploom | SmartCredit.io, [23.04.21 13:32]
Let’s think on DeFi:
1. You control your assets
2. You decided which services you use

This is a real free market

Martin Ploom | SmartCredit.io, [23.04.21 13:32]
But in this real free market the Lender did not had a choice

Martin Ploom | SmartCredit.io, [23.04.21 13:32]
Neither did the borrower’s

Martin Ploom | SmartCredit.io, [23.04.21 13:32]
They could use only Money-Market-Funds

Martin Ploom | SmartCredit.io, [23.04.21 13:32]
And we say – you have CHOICE now

Martin Ploom | SmartCredit.io, [23.04.21 13:32]
You can use Money-Market-Funds (if you wish)

Martin Ploom | SmartCredit.io, [23.04.21 13:33]
Or you can use FIF’s

The Cat ? [BitboyCrypto], [23.04.21 13:33]
What blockchain are you currently using and do you plan to adapt another blockchain in the future?

Martin Ploom | SmartCredit.io, [23.04.21 13:33]
We are built on the Ethereum

The Cat ? [BitboyCrypto], [23.04.21 13:33]
[In reply to Martin Ploom | SmartCredit.io]
CHOICE is a beautiful thing in a free market.

Martin Ploom | SmartCredit.io, [23.04.21 13:33]
Because most of the assets are in the Ethereum

Martin Ploom | SmartCredit.io, [23.04.21 13:34]
We have been discussing about moving to other chains too, but instead of porting everything to other chains ==> we would prefer the cross-chain approaches. Where we can run contracts on one chain and lock the assets (as collateral) on the other chains

The Cat ? [BitboyCrypto], [23.04.21 13:35]
cross chain interoperability is the future so I was going to ask that next.

Martin Ploom | SmartCredit.io, [23.04.21 13:35]
You are reading our mind!

The Cat ? [BitboyCrypto], [23.04.21 13:35]
[ ? Sticker ]

Martin Ploom | SmartCredit.io, [23.04.21 13:35]
Yes, what we see is that projects try to support multiple chains at the same time

Martin Ploom | SmartCredit.io, [23.04.21 13:35]
But there is question of the liquidity

Martin Ploom | SmartCredit.io, [23.04.21 13:36]
The other chains will need the assets – and they have to be transferred from the Ethereum into the other chains

Martin Ploom | SmartCredit.io, [23.04.21 13:35]
Yes, what we see is that projects try to support multiple chains at the same time

Martin Ploom | SmartCredit.io, [23.04.21 13:35]
But there is question of the liquidity

Martin Ploom | SmartCredit.io, [23.04.21 13:36]
The other chains will need the assets – and they have to be transferred from the Ethereum into the other chains

Martin Ploom | SmartCredit.io, [23.04.21 13:36]
And then this asset-ping-pong will start

Martin Ploom | SmartCredit.io, [23.04.21 13:36]
The cross-chain, where we could lock the assets in other chains directly would be much more effective approach

The Cat ? [BitboyCrypto], [23.04.21 13:36]
So lets discuss partnerships, you have been making some significant partnerships over the past couple months. Would you like to discuss anything you might have going on? Tradition is for a project to give us a bone or an announcement during the AMA. Is there anything you would like to reveal as far as partnerships go, or anything you want to specifically highlight that you have in the works?

The Cat ? [BitboyCrypto], [23.04.21 13:37]
[ ? Sticker ]

The Cat ? [BitboyCrypto], [23.04.21 13:37]
[In reply to Martin Ploom | SmartCredit.io]
Agreed

Tarmo, [23.04.21 13:37]
[In reply to The Cat ? [BitboyCrypto]]
[ Photo ]

Martin Ploom | SmartCredit.io, [23.04.21 13:38]
The only announcement that we can do, is that our Release 1.1 with the FIF’s will be available in the next day ?

The smart contract have been deployed into the Ethereum mainnet, the other components follow now.

Stay tuned – and we will have soon the major Release. Countdown is starting

Martin Ploom | SmartCredit.io, [23.04.21 13:39]
[ Photo ]

Martin Ploom | SmartCredit.io, [23.04.21 13:39]
Regarding our partnerships

The Cat ? [BitboyCrypto], [23.04.21 13:39]
[In reply to Martin Ploom | SmartCredit.io]
Common Martin I know you got something for the Bitsquad. ?

Martin Ploom | SmartCredit.io, [23.04.21 13:40]
Yes, the Release 1.1 will be available in the next days!

The era of CHOICE will start!

Martin Ploom | SmartCredit.io, [23.04.21 13:40]
Regarding the partnerships

Martin Ploom | SmartCredit.io, [23.04.21 13:40]
Our partners are integrating our borrow/lend widgets

Martin Ploom | SmartCredit.io, [23.04.21 13:41]
We have one payment engine partner (PiixPay) – their users can take / and give the loans with our widgets

The Cat ? [BitboyCrypto], [23.04.21 13:41]
[In reply to Martin Ploom | SmartCredit.io]
Which ones will be integrating borrow/lend widgets?

Martin Ploom | SmartCredit.io, [23.04.21 13:41]
We have PiixPay and CryptoTask integrating our widgets

Martin Ploom | SmartCredit.io, [23.04.21 13:41]
PiixPay is non-custodial payments engine

The Cat ? [BitboyCrypto], [23.04.21 13:41]
[In reply to Tarmo]
Thats several partners I can see integrate the widget.

Martin Ploom | SmartCredit.io, [23.04.21 13:42]
CryptoTask is non-custodial freelance platform

The Cat ? [BitboyCrypto], [23.04.21 13:42]
Very cool

Martin Ploom | SmartCredit.io, [23.04.21 13:42]
They will integrate the widgets after we are live with the Release 1.1

Martin Ploom | SmartCredit.io, [23.04.21 13:42]
Why is this important – because it’s effective way to grow

Martin Ploom | SmartCredit.io, [23.04.21 13:43]
The partners will earn loan origination fees and SMARTCREDIT tokens

Martin Ploom | SmartCredit.io, [23.04.21 13:43]
We get users and we will get orders into our loan orderbooks

Martin Ploom | SmartCredit.io, [23.04.21 13:43]
And I forgot – it’s the life-time-value for the partners

The Cat ? [BitboyCrypto], [23.04.21 13:43]
Speaking of obtaining users. What’s your growth strategy to grow the use of your service?

Martin Ploom | SmartCredit.io, [23.04.21 13:43]
They will earn the loan origination fees from their clients forever

Martin Ploom | SmartCredit.io, [23.04.21 13:44]
Our growth strategy has two pillars:
1. Traditional way – we get the users via our Digital Marketing and Community
2. The partners

Martin Ploom | SmartCredit.io, [23.04.21 13:44]
Every project is doing the traditional way

Martin Ploom | SmartCredit.io, [23.04.21 13:45]
But we say, let’s add the clients from the partners and let’s give proposal to the partners, where they will say YES or YES

Martin Ploom | SmartCredit.io, [23.04.21 13:45]
So, we help our partners to monetize their platforms

Martin Ploom | SmartCredit.io, [23.04.21 13:45]
Let’s think PiixPay – a crypto payment processor – they will transform to a mini bank now

Martin Ploom | SmartCredit.io, [23.04.21 13:46]
They have payments and they will get now borrow / lend / invest (with minimal effort on their side)

The Cat ? [BitboyCrypto], [23.04.21 13:46]
yes its a great deal on both sides.

Martin Ploom | SmartCredit.io, [23.04.21 13:47]
The same for any crypto vertical – any non-custodial project on Ethereum, with real product and real users – every of them can integrate the widgets

Martin Ploom | SmartCredit.io, [23.04.21 13:47]
[In reply to The Cat ? [BitboyCrypto]]
A life time value for the partners!

The Cat ? [BitboyCrypto], [23.04.21 13:47]
The last question I want to ask is there any benefit to holding Smartcredit tokens?

Martin Ploom | SmartCredit.io, [23.04.21 13:48]
We say:
1. Platform Functionality first
2. And then the utility of the token

Martin Ploom | SmartCredit.io, [23.04.21 13:48]
We will focus on the utility of the token in the Release 1.2 (coming 4 months after the Release 1.1.)

Martin Ploom | SmartCredit.io, [23.04.21 13:49]
And we will have:
– Borrower rewards
– Lender staking SMARTCREDIT via the FIF’s
– Integrator rewards
– and some more cool items

The Cat ? [BitboyCrypto], [23.04.21 13:50]
Very awesome the whole project has me excited for the future of DEFI and SmartCredit is my #1 personal bluechip project. I am rooting for you guys because of your previous experience. Is there anything else you would like to tell today’s audience before I open up the floodgates for user questions?

Martin Ploom | SmartCredit.io, [23.04.21 13:51]
Thank you!

Martin Ploom | SmartCredit.io, [23.04.21 13:51]
Let’s mention some key use cases

Martin Ploom | SmartCredit.io, [23.04.21 13:51]
For example

The Cat ? [BitboyCrypto], [23.04.21 13:51]
[In reply to Martin Ploom | SmartCredit.io]
Of course!

Martin Ploom | SmartCredit.io, [23.04.21 13:52]
Investor can take fixed-term-loan via monetizing the collateral AND invest this into yield farming

Martin Ploom | SmartCredit.io, [23.04.21 13:52]
Investor could do this with the Money Market Funds too, but he just doesn’t know how much interest he will have to pay there…. So, he can do a clean calculation with us

The Cat ? [BitboyCrypto], [23.04.21 13:53]
[In reply to Martin Ploom | SmartCredit.io]
Wow

Martin Ploom | SmartCredit.io, [23.04.21 13:53]
OR Investor could borrow stablecoins fixed term and go long ETH

Martin Ploom | SmartCredit.io, [23.04.21 13:53]
The issue with the Money-Market-Funds is that all are doing this at the same time

Martin Ploom | SmartCredit.io, [23.04.21 13:53]
And this results in these interest rate peaks in the Money-Market-Funds

Martin Ploom | SmartCredit.io, [23.04.21 13:54]
OR investor could borrow ETH fixed term and go short ETH

Martin Ploom | SmartCredit.io, [23.04.21 13:54]
Again ==> Investor could use these strategies with the Money Market Funds, but well, he doesn’t know how much he ends up paying. And let’s think – the market moves into the moods.

The Cat ? [BitboyCrypto], [23.04.21 13:55]
Right and that doesn’t work well for most people where the rate you are paying isn’t calculated.

Martin Ploom | SmartCredit.io, [23.04.21 13:55]
So, what’s about that the investor just takes 2 months loan and uses this for the trading instead of running with the market moods and with the fluctuating interest rates

Martin Ploom | SmartCredit.io, [23.04.21 13:55]
[In reply to The Cat ? [BitboyCrypto]]
We will put more articles into our blog about these use cases.

Martin Ploom | SmartCredit.io, [23.04.21 13:56]
Let’s spread this know how. Let’s offer CHOICE.

The Cat ? [BitboyCrypto], [23.04.21 13:56]
[ ? Sticker ]

The Cat ? [BitboyCrypto], [23.04.21 13:57]
[In reply to Martin Ploom | SmartCredit.io]
Sounds good anything else before I open the floodgates for you to pick the best 5 questions to win a prize?

Martin Ploom | SmartCredit.io, [23.04.21 13:58]
We are ready. Let’s go to the questions!