Stellar: The Right Platform for LendLedger

Platform with a Purpose

Ethereum? NEO? EOS? NEM? All of these and countless others compete for projects in the crypto ecosystem. Each comes with its own advantages and drawbacks. Take Ethereum for example, which offers a robust programming environment, but at the cost (so far) of scaling issues that result in high fees and slow transactions speeds.

At LendLedger, we thought long and hard about these trade-offs before deciding which platform best meets our goals and needs. In the end, it wasn’t even close. Stellar is a purpose-built platform, focused on payments and exchange of value. And just like LendLedger, it’s designed to make a global impact.

Small fees for small loans

We designed LendLedger to scale to thousands of daily transactions. Every day lenders will administer and disburse loans, and every day borrowers will make repayments on these loans. Repayments will range in size from large installments to micro-payments. For this reason, it is crucial for us to keep platform transaction fees as low as possible. High transactions fees are a non-starter when it comes to small loans and micro-repayments.

Going back to Ethereum. Whilst it promises to develop scaling solutions and reduce transaction costs, in its current form Ethereum is completely unsuitable for a project like ours. Many borrowers repay their loan daily with a percentage of business sales. With gas fees that range from $0.05–0.50 per transaction, borrowers would pay more in fees than the amount of the repayment itself. This makes many loans impossible for lender or borrower.

Stellar, on the other hand, has low and predictable transaction fees. At current rates, Stellar’s base transaction fee is a fraction of a fraction of a cent. Fees like this make even small loans and the related micro-repayments tenable. Bottom line, the more loans of all types and sizes LendLedger can enable, the greater impact we can have.

It can keep up with us, so we can keep up with you

As LendLedger grows, so will the number of daily transactions. The number of transactions generated by even one borrower can be large. Take a store owner, for example, who repays his loan through a small percentage fee taken from each sale he makes. Every day he’s generating dozens of transactions. Multiply this by thousand of users and on a given day LendLedger will have to process tens of thousands of transactions. For many platforms out there, this represents their entire daily capacity.

A platform that can scale to accommodate this transaction volume is crucial. Stellar’s limits aren’t precisely known, but their developers conservatively estimate a capacity of 1,000 transactions per second. With this kind of capacity, we can deploy a fully-functioning platform without worrying that it might bog down itself, or the rest of the Stellar network.

Many lenders will rely on the LendLedger network to provide real-time loan offerings to potential borrowers. Accepting a loan should be seamless and quick. On Stellar, transactions are confirmed in three seconds. On Ethereum, on one of those days where CryptoKitties or ICOs are clogging the network, transactions may take three hours.

The discrepancy in time between when a borrower accepts a loan, and when a loan is confirmed also leaves a window open for malicious actors to game the system. Loans that clear quickly mean not only happier customers but a more secure system for everyone.

It keeps us (and you!) safe

The Stellar smart contract system is simpler and more secure than many competing platforms. This is critical for projects like ours that handle large amounts of value for users.

Frequent bugs, bugs and hacks, and more hacks of Turing-complete systems make them an unattractive option. Instead, Stellar enables a diverse range of smart-contract functionality without the complexities and vulnerabilities of such platforms.

When we consider the funds users will have staked on the system, we rest easier thanks to the minimized attack surface of Stellar smart contracts.

The simplified Stellar smart contract system also significantly lowers the learning curve for developers. Fewer moving parts means lower potential for bugs and greater speed and efficiency in development. Over the long run this should translate into more resources spent on new development and innovation.

Our mission is their mission

At LendLedger we’re striving to create a world where credit is available to everyone and trust between parties is a given. For far too long billions of potential borrowers, and the trillions of dollars which go with them, have been disregarded. Our co-founders Gautam Ivatury and Manish Khera saw this early on, when they created Happy Loans in India.

This same vision drives Stellar. The non-profit platform was established in 2014 with founder, Jed McCaleb, working to promote global financial access, literacy, and inclusion. Just like us Stellar agrees that universal access to affordable, financial services are a fundamental right. Seen from an ideological standpoint, for LendLedger, Stellar was the obvious choice.

We look forward to joining other pioneering projects such as MADnetwork, Mobius, SureReemit, and Kik to build out the Stellar ecosystem. Come join us at www.lendledger.io or on any of our community channels.