P2P lending on Tokpie. The new way of token staking.
P2P cryptocurrency lending on Tokpie exchange built on promissory notes trading. Applying to TKP token lending, a borrower issues a TKP promissory note pledged by collateral and sells it on the free market to get a crypto loan. On the other side, a lender buys the promissory notes at a discounted price to get a full principal amount of TKP later and make a profit. In addition, peers can use many other profitable strategies and tactics. Welcome to the new era of token staking!
TKP lending vs token staking
Being based on Promissory notes trading, TKP lending is like token staking but better. Although token staking rewards might be more predictable, TKP lenders can set any interest rates, receive profits and take funds back at any moment. All other benefits are described in the next section.
Advantages
Peer-to-peer TKP token lending built on promissory notes trading, provides lenders and borrowers with the following unique advantages:
Fair-market interest rates
TKP lenders and borrowers negotiate interest rates through bargaining on promissory notes prices. As a result, peers are always defining fair-market interest rates.
Cancelation at any time without penalties
A lender can cancel a deal at any moment by selling promissory notes that he has previously bought. Besides, a borrower can cancel (settle) his loan at any moment without penalty by buying back a promissory note initially issued and traded.
No minimal deposits and lockups
TKP token staking through lending and borrowing is possible starting from just 1 TKP token. Moreover, there is no need to lockup funds. If a lender urgently needs the money he can just sell promissory notes.
No KYC and credit checks
Tokpie exchange’s users don’t have to pass through the KYC procedure for making crypto withdrawals below $2,500.00/day threshold. Also, borrowers don’t have to prove their incomes and credibility.
10+ profitable strategies
There are 10+ profitable strategies for p2p crypto lending based on promissory notes trading.
What is TKP?
The TOKPIE (TKP) is an ERC20 token of Tokpie exchange. Token total issuance is 100,000,000 TKP. The utility value and benefits of having TKP tokens are the following:
- 500% trade fees discount
- Almost 200% discount on withdrawal commissions
- Receiving airdrops in altcoins of all listed projects every week
- Up to 70% referral bonus
- Accepted as means of payment on Tokpie IEO Launchpad
- Used as collateral for bounty stakes depositing
- Accepted for P2P lending and borrowing ?
- Ability to increase LTV (loan-to-value) ratio up to 90% for P2P borrowing. ?
What is a Promissory Note?
Applying to TKP token, a one TKP Promissory Note is a digital title that confirms the issuer’s promise to pay 1 (one) TKP to Tokpie at the specified maturity date. Tokpie, in turn, will guaranty to pay 1 (one) TKP to any holder of one Promissory Note at the specified maturity date.
A user can issue and sell (to get a loan), buy (to lend), settle before the maturity date or hold until repayment TKP promissory notes. Because of internal circulation, users can not withdraw Promissory Notes from the Tokpie exchange.
How to lend TKP tokens?
To lend TKP tokens and earn competitive returns you need to become a holder of TKP promissory notes. In other words, TKP token lending is the same as purchasing TKP promissory notes as described below:
- Sign up or log in Tokpie exchange.
- Make sure that you have TKP tokens on your Tokpie account balance. If you don’t have TKP tokens you can deposit them from outside or buy on Tokpie TKP/ETH and TKP/USDC markets.
- Open any of four TKP Promissory notes markets which have different maturity dates:
TKP_PN_15_Dec_2020 (Maturity date: 15-DEC-2020)
TKP_PN_15_Mar_2021 (Maturity date: 15-MAR-2021)
TKP_PN_15_Jun_2021 (Maturity date: 15-JUN-2021)
TKP_PN_15_Sep_2021 (Maturity date: 15-SEP-2021)
Maturity refers to the date when a Promissory note principal amount is repaid. For example, a TKP_PN_15_Mar_2020 note will mature on March 15, 2020; the holder will receive the principal amount on that date - After that, click on [BUY], enter quantity, price, and press [SUBMIT ORDER] button.
Example
To make a profit a lender needs to purchase TKP Promissory Notes from other users at a discounted price. As shown in the figure above, a lender is going to purchase 100 Promissory notes at a price of 0.95 TKP per note. The cost of the deal will be 95 TKP (100 x 0.95).
Therefore, the lender will get 100 TKP (1 TKP principle amount x 100 notes) on March 15, 2020, maturity date. The profit will be 5 TKP (100-95); that equals 20.44% APR (Annual interest rate) if the lender holds the promissory notes until March 15, 2020.
In addition, if promissory notes’ prices go up, a lender could sell them in seconds at any time before the maturity date and also make a profit!
TIP: Lenders can set any BID price and bargain in the Order Book trying to purchase at a lower price. It will increase the so-called token staking reward. In other words, the lower purchase price the higher profit a lender will get!
Profit explanation: A lender’s income is calculated as (1- price) x quantity of Promissory notes bought. So, the lower a purchase (matched) price the higher income will be earned.
Lend APR explanation: Annual Interest Rate is calculated as (1-price) / price / number of days until the promissory note maturity date x 365 x 100%.
Therefore, to maximize returns, the lender should try to purchase a Promissory note with the earliest maturity date and at the lowest price.
How to borrow TKP tokens?
To get a loan in TKP tokens you need to issue and sell TKP promissory notes as described below.
How to Issue TKP promissory notes?
To issue TKP promissory notes perform the following steps:
- Sign up or log in Tokpie exchange.
- Make sure that you have funds (ETH, USDC or TKP tokens) for collateral on your Tokpie account balance. If you don’t have any of collateral cryptocurrencies, deposit them from outside.
- Open Borrow section
- Select a Promissory Note title.
For example, a title TKP_PN_15_Mar_2020 means a TKP token Promissory Note with March 15, 2020 maturity date. - Enter how many Promissory Notes you want to issue.
The issue of 1 promissory note is like a creation of a new digital asset that gives its holder a right to get 1 TKP token in the future (future is maturity date e.g. on March 15, 2020).
NOTE: You don’t make any loan when issuing promissory notes. Because only you’re the holder of promissory notes which have been just issued. - After that, select collateral cryptocurrency.
You can choose ETH, USDC, or TKP tokens. In the next grey colored fields, you could see the required collateral amount and how much of them available on your balance. - To complete the Promissory notes issue, check a box and press ‘Collateralize & Deposit’ green button.
- If you have enough collateral amount, TKP Promissory Notes appear on your Tokpie account and you can sell them to get a loan. You can trade promissory notes all at once or partially as any other crypto asset for competitive prices.
TIP: After a successful Promissory notes issuance you also see them in your Collateralized Assets table, click on the hummer icon (as shown in the picture above) to open the related order book and sell.
What is a collateral cryptocurrency?
A collateral cryptocurrency is an asset that can be used as “collateral” for promissory note issuance. Currently, Ethereum (ETH), USDC, and TKP can be used as collateral currency when issuing TKP promissory notes.
What is the collateral amount?
A user sees the required amount of collateral cryptocurrency before promissory notes issuance. The platform calculates it automatically due to the formula: (Quantity x Price / LTV) x 100, where
Price is a USD equivalent of the current highest BID of the promissory note that is going to be issued.
Quantity is the number of promissory notes which are going to be issued
LTV is a Loan-to-Value ratio. LTV ratio varies from 70% to 90% depending on a user’s subscription plan.
How to increase LTV (Loan-to-Value) ratio?
All Tokpie users get Trial status with a 70% LTV ratio when register. To increase LTV ratio up to 90% a user shall upgrade his subscription plan from Trial to the Light, Standard, Premium or Enterprise plan. It will require a specified amount of TKP tokens to be locked on a user’s Tokpie account balance. Check all plans and their advantages here.
How to settle promissory notes before the maturity date?
Open the Borrow section, and click on the settle button in the related line as shown in the picture below. The result, the system unlocks collateral in a few seconds.
Moreover, you do not pay any penalty or fees for the settlement made before the maturity date.
Important: To settle, you must have the same amount of the same Promissory Note title available on your account balance.
How to sell TKP promissory notes?
After a successful Promissory notes issuance, you can sell them to get a loan as explained below.
- Open a related order book.
Every Promissory note has one related Order Book (market) where peers can trade it until maturity date:
TKP_PN_15_Dec_2020 (Maturity date: 15-DEC-2020)
TKP_PN_15_Mar_2021 (Maturity date: 15-MAR-2021)
TKP_PN_15_Jun_2021 (Maturity date: 15-JUN-2021)
TKP_PN_15_Sep_2021 (Maturity date: 15-SEP-2021) - Sell TKP Promissory Notes: click on [SELL], enter quantity, price, and press the [SUBMIT ORDER] button.
Example
As shown in the figure above, a borrower is going to sell 100 Promissory notes to lenders at a price of 0.94 TKP per one note.
After clicking on the Submit Order button, a borrower gets 94 TKP (0.94 TKP price x 100 notes) IMMEDIATELY. The potential Borrow APR (Annual interest rate) of that deal could be 24.78% if a borrower waits for a maturity date and repay principal amount 100 TKP on March 15, 2020.
However, a borrower has a great option to settle the Promissory Notes before maturity date at any time and unlock collateral! No, any penalties or fees will be charged for such settlement (early repayment).
An early repayment makes sense when a borrower urgently needs to withdraw collateral or when promissory note price goes down.
If the price goes down a borrower can purchase the same amount of the same promissory note title and click settle as shown here. The profit will be the difference between the sale and the purchase prices.
TIP: A borrower can set any ASK price and bargain in the Order Book trying to sell at a higher price. In other words, the higher the selling price the lower the borrow APR (cost of a loan)!
How to repay Promissory notes and unlock collateral?
There are two options. The first one is to settle before the maturity date. The second option is to wait for the maturity date. During the Promissory note maturity day, the system will deduct the note’s principal amount from the issuer balance automatically. For example, if a user issued 100 [TKP_PN_15_Mar_2020] then 100 TKP will be deducted from his balance between March 15, 2020, 00:01 UTC and March 15, 2020, 23:59 UTC.
What happens if the Promissory notes are not paid?
If on the maturity date, a borrower doesn’t have enough quantity of TKP tokens to pay the promissory notes which he had issued, the system will liquidate collateral.
How to get ETH by borrowing TKP
To get Ethereum (ETH) by borrowing TKP do the following:
- Borrow TKP using ETH, TKP, or USDC as collateral
- Exchange TKP for Ethereum on TKP/ETH market
How to get USDC by borrowing TKP
To get USD stable coin (USDC) by borrowing TKP do the following:
- Borrow TKP using ETH, TKP, or USDC as collateral
- Exchange TKP for USDC on TKP/USDC market
What is the Annual Percentage Rate (APR)?
APR (Annual Percentage Rate) is the annual rate showing the ‘cost’ of borrowing or ‘profit’ earned through lending. The APR formula is(1-price) / price / number of days until the promissory note maturity date x 365 x 100%.
Borrow APR is expressed as a percentage that represents the potential yearly cost of crypto funds if a borrower repays a promissory note on its maturity date. It’s called potential cost because a borrower can settle a promissory note at any time before maturity.
Lend APR, equals to borrow APR, but represents the potential yearly income of crypto funds if a lender buys and holds a promissory note until its maturity date. It’s called potential income because a lender can sell a promissory note at any time before maturity.
Example: When a borrower receives 0.9 TKP on Dec 15, 2019, by selling a promissory note, that will mature on Mar 15, 2020, he will have to repay 1 TKP in 90 days. The cost of that loan is 0.1 TKP (1-0.9) for 90 days.
APR = 0.1 / 0.9 / 90 x 365 x 100% = 45.06%
Fees
Small trading fees are applied depending on a user’s subscription plan.
Profitable strategies for TKP lending and borrowing
Promissory notes trading strategy
Take a profit by buying TKP Promissory notes at a low price to sell them at a higher price and vice versa.
TIP: The growing price of promissory notes and plenty of BIDs in the order book is a good sign that the token’s spot price will grow soon on ordinary exchanges.
DeFi strategies to escalate incomes
Additional ways to increase income is to utilize two decentralized-finance arbitrage strategies.
Cross-cryptocurrencies arbitrage
Follow the simple strategy borrow at Low Rate and Lend at a High Rate. Institutional traders utilize that approach for decades in classic fiat markets when for example they borrow EUR at a low rate and lend USD at a higher rate because of ECB and FED different interest rates. Therefore, you can catch an option to lend USDC, ETH, or any other crypto at a higher APR than a borrowing rate for TKP token on a moment. In that case, TKP will be a funding currency. On the other hand, sometime TKP token lending rates can higher than borrow APR of other cryptocurrencies on any other platforms. In that case, it makes sense to get a loan in another crypto and invest in TKP token lending.
Cross-markets arbitrage
Another option is to make arbitrage by selling (borrowing) Promissory notes in one market with low APR and simultaneously buying (lending) a Promissory note of the same currency with another maturity day on another market at a higher lend APR.
Passive income strategies
Above all, users can use simple passive income strategies without funds locking and minimal deposits. Lending TKP is like token staking but better because getting token staking yields always requires locking of funds.
- Purchase TKP promissory notes when TKP token lending rates are high.
- TKP token lending is especially profitable when TKP price is going to grow
- When TKP token is oversold, buy long-duration TKP promissory notes
- Regularly lend if you have TKP surplus
Hedging strategies
Due to constant market fluctuations borrowing strategies could allow you to earn profit and hedge the risks of the TKP token price dump:
- Get a TKP loan when borrow APR is low
- Borrow TKP if urgently need TKP, USDC or ETH
- Sell TKP promissory notes (borrow) if TKP price is going down
- When TKP overbought (price is too high) it’s better to borrow it then purchase directly from the market.
- In case you face a TKP shortage, but can not find enough liquidity, try to borrow TKP instead of pumping the price.
Summary
TKP is becoming one of the best staking coins thanks to the unique P2P lending solution based on Promissory Notes trading. Borrowers can get instant loans from peers with fair-market rates, trade them or repay at any time without penalties. They also don’t have to pass through KYC and credit checks. Moreover, the ability to take funds with returns at any time and the absence of minimum deposit makes TKP lending better than any other token staking.
