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Author Topic: Hylen - Autonomous decentralized loan system  (Read 481 times)
egpublic
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June 24, 2017, 05:39:35 PM
 #1

Hylen is a digital asset and smart contract system that allows you to build trust, and borrow ETH against that trust.

Using the ERC-20 standard, Hylen can be used without any exchanges, as it is backed 1:1 with ETH. This means that any wallet supporting ERC-20 tokens, also supports the Hylen loan system.

For investors: ETH is sent to the Hylen smart contract, and HYL tokens are returned. The HYL token can then be held to receive dividends in ETH, or sent to the closure address to receive your ETH back.

For traders: ETH is sent to the Hylen smart contract, and HYL tokens are returned. These are then sent to the loan address, in which you will receive 1.2-2x your HYL in ETH, depending on your trust level.


Interest rate: Interest is calculated daily, and split 60/40. 60% is sent to the default reserve, while 40% is sent to token holders.

Initial deposit: When you first receive HYL, 0.1 ETH is held until you send all your HYL to the closure address. This is used to ensure a borrower has put down collateral, while not affecting investors.

Loan address: When you receive Hylen, your ethereum address is added to the trust database. Trust is built every time you make a trade and pay all of your debts in full. Initially, your account starts with a trust level of 1 and you can only take out 1.1x your deposit. As your account gets older, your trust level increases and so does your loan limit. Trust level is calculated based on age of account and number of trades. If at any time you fail to pay your debt, your reserve deposit(0.1 ETH) is taken and your trust level reset.

Closure address: closing your account will reset your trust level, and if all debts are paid, your deposit returned.


Managing bad actors: There are two systems to minimize default risk to loaners:
1: Fees are adjusted inline with the default reserve. The default reserve is funded by fees paid by traders in the form of interest.
2: 0.1 ETH is required to stay in your account. If you are in good standing(all debts paid), your deposit will be returned when you close your account. The reserve deposit is adjusted in only high default ratio situations.

This project is still in alpha stages, but progress is moving along steadily. There will not be any ICO, as HYL will be backed by ETH 1:1. I am also looking for other developers, as I am the sole developer at this time.

I am not giving myself any HYL tokens, and as such, donations will be greatly appreciated. The top 10 donors will receive early access to the HYL system as thanks for their support.

ETH Donation: 0x57681ff8ab9eaDB753D17fa17414661631638d48
BTC Donation: 19JS3fsiPHfuLL5GE261Jxdz4ho2t3kTZa
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June 24, 2017, 07:12:19 PM
 #2

That's interesting, are you have something like whitepaper? I'm interested and would like to learn more and even contribute.

So, how if loaner receive a coin(has been loaned) that more than 0.1 ETH? It will very detrimental to lender, isn't?
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June 24, 2017, 08:28:48 PM
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That's interesting, are you have something like whitepaper? I'm interested and would like to learn more and even contribute.

So, how if loaner receive a coin(has been loaned) that more than 0.1 ETH? It will very detrimental to lender, isn't?

Thanks for your interest, i'm actively working on the code itself, and will try to finalize a whitepaper when all of the systems are in place.

HYL tokens will be backed 1 to 1 by ETH, this means that every HYL token that exists will be backed 100% by ETH. That means if I send 0.45 ETH to the HYL contract, I will receive 0.45 HYL in return. If I choose to then borrow ETH, I can send my 0.45 HYL to the loan contract and can receive up to 2x(0.9) my deposit if i'm a trusted borrower.

If you have any other questions, let me know!
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June 25, 2017, 11:47:20 AM
 #4

Interesting project.I like the trust system and the 60/40 split for interest payments.
However,as far as i understand only people who make ethereum deposits will have the right to get a loan.
Do you plan to submit other cryptocurrencies?
What if most of the traders choose to lose their 0.1 ETH and default,after they build some trust and get bigger loans?



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egpublic
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June 25, 2017, 02:15:54 PM
 #5

Interesting project.I like the trust system and the 60/40 split for interest payments.
However,as far as i understand only people who make ethereum deposits will have the right to get a loan.
Do you plan to submit other cryptocurrencies?
What if most of the traders choose to lose their 0.1 ETH and default,after they build some trust and get bigger loans?


Interest rate will also be adjusted towards token holders when the default reserve is 50% of loan pool, this ensures that a healthy system will pay out the most to token holders.

Hylen will act as a typical loan system, in that you put down collateral(ETH) and are matched a percentage(1.2-2x). The initial deposit of 0.1 ETH is held to ensure a trader doesn't take the money and run, as the deposit amount will be a larger sum then the amount received as a loan.

Eg. I'm a new borrower, and I deposit 1 ETH. I will receive 0.9 HYL as a result, with 0.1 ETH being held as my deposit. Since i'm a new borrower, my trust level is low and I can only borrow 1.2x my deposit, 1.08 ETH(0.9 HYL * 1.2 = 1.08 ETH). This isn't profitable, as you will actively lose money attempting to work the system.

My goal is to have new borrowers right above the profitable line, as to incentivize continued borrowing, but also to curb bad actors attempting to steal from the system. As borrowers gain more trust, profitability gains as well. While someone could build trust and then suddenly not pay their dues, this is offset by a sliding scale of interest rates calculated daily against the default reserve. total interest paid to build that trust should out weight any profits made by purely borrowing.

All numbers are subject to change, as most of them will be on a sliding scale for better automation.
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