Welcome to another startup spotlight with Building Web3. Today, we learn about Zivoe, an innovative startup dedicated to stopping predatory lending practices. Zivoe is revolutionizing the financial landscape by addressing the pressing issue of high-interest consumer loans. In this spotlight, we explore how Zivoe is bridging the gap between traditional finance and blockchain technology to offer more affordable credit solutions.
What is Zivoe?
Zivoe is a real-world asset credit protocol designed to disrupt the high-interest consumer lending market. The platform connects on-chain liquidity with real-world borrowers through partnerships with loan servicing companies. By doing so, Zivoe aims to provide a more affordable alternative to the predatory lending practices that plague many consumers today.
How Zivoe Works
Leveraging On-Chain Liquidity
Zivoe allows global crypto users to provide liquidity to the protocol, which is then lent out to their lending partner, Zinclusive, a US-based FinTech company. Zinclusive takes this capital off-chain and uses it to fund consumer loans at much lower interest rates compared to traditional lenders. For instance, Zivoe aims to refinance high-interest loans, gradually reducing them from exorbitant APRs to more manageable rates over time.
Addressing the Non-Prime Borrowing Market
Providing Fair Credit Solutions
Non-prime borrowers, who make up about half of the adult US population, often find themselves paying triple-digit APRs for small loans. Zivoe targets this demographic, offering them a path to more affordable credit. The typical non-prime borrower is underserved by traditional financial institutions and ends up with predatory lenders due to a lack of better options. Zivoe’s mission is to provide these borrowers with fairer, more reasonable lending rates.
The Technology and Future Prospects
Embracing Ethereum and Beyond
Zivoe leverages the Ethereum blockchain to tap into the largest pool of liquidity. However, they plan to explore cheaper EVM-compatible Layer 1 or Layer 2 solutions as they expand. Zivoe’s approach focuses on providing a user-friendly Web2 experience initially, with plans to transition more operations on-chain as users become more comfortable with the technology.
Conclusion
Zivoe stands out in the Web3 lending space due to its focus on real-world impact, experienced team, and strategic approach to risk management. As they prepare for their official launch and initial tranche offering, Zivoe is poised to make significant strides in transforming the consumer lending landscape.
If you want to hear directly from Thor Abbasi about the latest developments of Zivoe and bringing TradFi to the blockchain. Checkout his interview with Building Web3 below: 👇
As always, stay tuned to the Building Web3 podcast for more insights and developments in the Web3 space.
Disclaimer: This post is for informational purposes only and does not constitute financial advice or a solicitation for the sale or purchase of securities.
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