ETHLend Founder, Stanislav Kulechov, Says Traditional Banking Will Disappear Sooner Than You Think

Stanislav Kulechov founded ETHLend to provide decentralised lending in the peer to peer blockchain market, and provide competitive finance across the globe – can this emerging tech remove barriers to startups, everywhere, and soon?

RISING How does ETHLend work and what innovations is it able to support? STANISLAV KULECHOV, FOUNDER ‘The underlying ability of ETHLend is to provide you with the market to receive finance in the form of Ethereum, or our native LEND token, without selling your digital assets. In other words, the borrower can use digital assets as a collateral for obtaining the finance from different parts of the world within few seconds or minutes.’

‘The market is peer to peer and fully decentralised with the use of Smart Contracts, which are execution of code that cannot be changed afterwards (you do not need to trust us, when you trust the code). All transactions are broadcasted to the Ethereum blockchain network and ETHLend does not hold funds and cannot interfere with the lending process. How cool is that?’

RISING Why is this decentralised lending important to innovation for new, small scale startups? SK ‘Decentralised lending provides a new global liquidity market, which means that individuals and startups are not limited to the local banks and peer to peer lenders. Instead, with a single loan request the borrower can receive competitive finance globally. Such solution provides more liquidity to local markets and the additional liquidity should apply some pressure on the interest rates.’

Keep things simple: less friction creates more opportunities

RISING What are the three biggest lessons you have learned as founder of ETHlend? SK ‘Keeping things simple. At ETHLend we are developing high-end blockchain technology and complex financial products, which are in their nature quite simple. Currently we’re creating a decentralised lending market, where cryptocurrency holders can use their digital assets as a collateral to receive liquidity. So, the underlying purpose of our financial applications is to fulfil needs for demand.’

‘To be able to penetrate this new emerging market, ETHLend focuses on providing an easy-to-use user interface and a simple way to receive funding. This is upheld in our way of thinking and communication as well: less friction provides more opportunities.’

RISING What has been your biggest challenge and how did you overcome it? SK ‘The biggest challenge is to create decentralised applications without limiting the user experience. These are running on the blockchain network, which means that all data is stored and retrieved from the Ethereum blockchain. So, ETHLend does not hold funds, private cryptocurrency keys or hold a database.’

‘Such an approach makes the application more resistant to hacking and manipulation. However, to be able to interact with the blockchain network, the user must face a certain learning curve for cryptocurrencies and blockchain technology. We plan to overcome this issue by creating a more seamless user experience and reducing the learning curve for new users.’

RISING What has been the company’s biggest achievement? SK Our biggest achievement has been our ability to provide a market-entry product to a market, which has not existed before. In other words, ETHLend was able to prove with over 5000 ETH (above 4.5 million USD) lending volume since the launch of the application last December, that anything is possible if you and your team believe in it enough.’

RISING Which leaders do you admire? SK ‘Elon Musk comes first to my mind. I think he tries to realise visions that have never been done before such as SpaceX. I noticed during the test application, that we received some critique that the application is not useful because digital assets are liquid enough to sell. Nevertheless, we pursued our dream and vision, and ended up with an early Alpha decentralised application, which saw an awesome amount of early adopters and lending volume.’

‘I have always admired Steve Jobs for his way of creating software with the user experience prioritised. Like Musk, Jobs also had been trying to create something completely new that had not existed before or that the market thought the technology was not ripe enough. My vision is to be the Steve Jobs of FinTech.’

RISING What do you predict the biggest impact of blockchain on the finance industry will be in the next five years? SK ‘I think the next big step will be an initiative from the banking industry on the distributed ledger technology. Currently banks all around the world are quite busy on refactoring their internet banking user experience and that is the priority amongst banks.’

‘I believe after this milestone banks will be more actively adopting blockchain technology and we will see some mass adoption in protocols amongst the banking industry. I believe that banks will become market makers on different blockchain based protocols and markets instead of monopolising the market.’

RISING Do you feel that blockchain offers a vision of democratised opportunity for startups? SK ‘I believe so. However, democracy is not something that the blockchain provides out of the box. In my opinion, the blockchain and especially smart contracts provide different kind of ways to create applications, such as voting or basic applications with democracy in mind. On the other hand, to provide democracy it would be fully up to the project initiators to bring such solutions for their user base or community. Just obtaining blockchain technology does not by itself lead to democracy.’

Traditional banking will disappear in its current form – there’s a lot of interest in blockchain

RISING Can you give an example of where ETHLend has enabled this kind of thing? SK ‘The democracy in ETHLend would be obtained in more larger perspective. Currently inflation-adjusted interest rates vary around the world. For example, in Brazil the interest rates might be around 24%, but 12-15% in India and Russian. On the other hand, European interest rates might vary from 1-5%. When we bring more liquidity to high interest rate markets we could achieve a more democratised lending market by reducing the interest rate differences, globally.’

RISING Should the central banks be nervous? SK ‘Yes and no. It is difficult to see what banks will be in the future. However, we can see that traditional banking will disappear in its current form. I think it would be beneficial for banks to keep up with the emerging technology, not merely to survive in the industry, but more for the reason to provide the best user experience and security for their customers.’

‘ETHLend is part of Enterprise Ethereum Alliance (EEA) Banking working group and we are sharing our expertise with the banking industry. So, there’s definitely interest in blockchain by banks. We have also been contacted by banks and FinTech VCs, which are interested in acquiring ETHLend. I believe we’ll see a lot of M&A action in the blockchain industry in the next five years.’

RISING What would be your three top tips for new entrepreneurs in this changing financial landscape, looking to grow their startups quickly? SK ‘Your product is your most important leverage, so make sure the quality is top notch. Respect your early adopters and community members. Enjoy the process of creating something new – sometimes you might work 18 hours for months, so you should enjoy what you are doing!’

WHAT NEXT? Want inspiration for your own startup? Then read our interview with the former MD of Red Bull who set up his own natural energy drink company…

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