UniLend Announces Plans to Integrate Flash Loans on their Platform

Cryptocurrency FlashLoans

 

One of the most popular services in decentralized finance (DeFi) are the lending markets. Even with their immense popularity, decentralized lending markets are still in their infancy. Most decentralized lending markets only allow for very basic collateralized loans, which makes it difficult for them to compete against their centralized counterparts.

A few lending markets in DeFi have innovated and integrated Flash Loans into their lending markets. UniLend, an up and coming cryptocurrency money market has plans to offer Flash Loans. Flash Loans are still pretty much the most underutilized gem in decentralized finance. This article will cover what Flash Loans are and their adoption so far.

Flash Loans

Flash Loans are loans that do not require any collateral obligations from borrowers, so essentially they are non collateralized loans. To individuals who are new to decentralized finance a non collateralized loan might not seem that interesting. Afterall, in traditional finance (TradFi) there are a lot of different uncollateralized loans and lines of credit.

The difference between TradFi and DeFi is that DeFi is completely digital and does not require any identification or even authentication. DeFi also tends to be completely borderless thus almost all of the rules and regulations that apply to TradFi are not present in DeFi. The severe lack of rules in DeFi make the task of collecting on a non-collateralized loan very difficult, therefore a new type of non-collateralized loan, Flash Loan, had to be created exclusively for DeFi.

How Flash Loans Work

The trick behind Flash Loans is that they only last for one transaction block, which means the loan a person takes out will have to be repaid in the same transaction. The loans in a Flash Loan are taken from a pool, and this money needs to be returned to the pool in the same transaction.

The way it works is that a single transaction on Ethereum can have multiple steps. Additional steps can be added into an ERC20 transaction through the use of Smart Contracts. Each of the steps might seem like a transaction but in reality they are simply routing tokens around from smart contracts. As such the tokens borrowed in a Flash Loan are never really deposited in the borrower’s wallet. The borrowed tokens are simply routed around, and interact with different smart contracts. The smart contracts will only really execute the trade if the individual can repay the loan after the transaction has been completed.

Under the scenario that an individual will not be able to repay the loan to the liquidity pools after the transaction has been completed, the smart contracts will simply cancel the transaction. Once, the transaction has been canceled all funds will simply be returned to the original liquidity pools.

UniLend Adopting Flash Loans

UniLend has already made plans to allow the borrowing and lending of any ERC20, so to have Flash Loans on top of that could be a really interesting use case. Nevertheless, Flash Loans bring an immense amount of utility to any lending platform and integrating them will always make for a practical use case.

An interesting note about Flash Loans is that they haven’t really gained much adoption from a lot of decentralized lending platforms. However, they have actually gained a lot of attention from users in decentralized finance. The biggest and one of the very few players in Flash Loans right now is Aave and they have reported $2 billion USD in transaction volume from Flash Loans in just one year.

The market for Flash Loans also does not seem to be anywhere near saturation at this point. The trend of popularity for Flash Loans was slow at first but now they are at an exponential rate of growth.

Karatbars International Timeline: From Forbes Endorsements to Scam Accusations

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Karatbars International is accused of conducting a MLM scheme that had promised a near 4000% return on investment to its ICO buyers. This lofty goal was to be delivered through swapping investors purchased coins with bullion. The project’s claim was that the ICO money would enable it to develop mines across Africa. However, none of the projects’ claims have come to life.

Instead, the company and its well-known promoters have come under fire.

 

Here’s a quick timeline:

Q1 – Q2, 2018: Karatbars ICO goes public.

Mid-2018: ICO ends, with golden reviews from ICO Bench. (interesting note: ICO Bench’s “Benchy” algo scores Binance’s BNB as 1.2 stars.) ICO claims to have raised $100M, making Karatbars one of the highest fundraises in ICO history.

May 2018: Karatbars claims to have partnered with a Bougainville king; this king is ousted as a fraud.

May 2019: Forbes proclaims Karatbars as a potential industry leader. Bitcoinist initiates Karatbars promotions.

May 2019: John McAfee endorses Karatbars.

June 2019: News BTC initiates organic promotions for Karatbars.

July 4 2019: Gold Independence Day. Investors promised return of 40x. Event fails and investors get nothing.

May – July 2019: Cointelegraph initiates massive promotional campaign for Karatbars with consecutive sponsored content and banner ads. CCN joins in and initiates additional promotions for Karatbars.

July 2019: Karatbars’ heavily-marketed Gold Independence Day arrives. This event was meant to enable investors to redeem their gold. Karatbars hosted the event but sought a several month extension.

August 2019: News BTC roles out new promotional campaign for Karatbars. Back-to-back content is released to support Karatbars (example and example).

August 2019: German press release states Harald Seiz, Karatbar CEO, admits in court that his project issued useless tokens that have no utility or value. Simultaneously, minor German media site releases media to defend Karatbars.

October 2019: Media claim that Karatbars’ promoter is under investigation by Florida Authorities. Additional media release editorial pieces on Karatbars. HitBTC delists the coin. CoinMarketCap issues a warning.

October 2019: Bitcoinist releases promotional content in defense of Karatbars. Meanwhile, other Crypto media scramble to hide their links to Karatbars.

 

There are several important things to note.

Notable members of the Bitcoin community have accused Karatbars of being a scam. The popular MLM research site, BehindMLM, has also accused Karatbars of being a scam. Various cryptocurrency media, even those that once promoted Karatbars, accuse the company of being a scam. There is no legal verdict yet.

Karatbars maintains its legitimacy. However, the company’s leadership is currently in court. CoinCurb will announce court decisions once they’ve been made public.

Karatbars International Pitches $200 Billion Target at Dubai Event

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Karatbars International GmbH, a German company which claims to operate in the bullion business, has witnessed harsh accusation from CoinDesk, Bitcoin.com, and Andreas Antonopoulos

Karatbars International got involved in the cryptocurrency space with the claim of creating a new global monetary system, backed by gold and operated by the blockchain. The company had suggested it had gold reserves sources from Madagascar, valued in the billions of dollar. However, CoinDesk has reported that Madagascar’s government agencies have denied Karatbars’ claims. Bitcoin.com and renowned Bitcoin evangelist Antonopoulos have made sharper claims, going as far as calling Karatbars a ponzi. 

Other cryptocurrency media have touted similar allegations against Karatbars International and its founders. However, as CoinCurb reported earlier, cryptocurrency media has had a sudden shift towards Karatbars International, as most media were on the company’s payroll in the past. 

From Love to Hate: Karatbars International and the Crypto Media

The backlash Karatbars International currently faces from Crypto media is at odds with grand support it has received from major blockchain media titles. 

Earlier this year, Cointelegraph sold banner ads, sponsored content, and even organic mentions to Karatbars International and its founders, Harald Seiz, Josip Heit, Alex Bodi, and Ovidiu Toma. CCN, another major coin media, also offered a spread of promotional services to Karatbars. Other media, including Forbes, were also receiving payments to promote Karatbars. However, things have taken a sudden turn. 

After CoinDesk and Antonopoulos presented allegations against Karatbars International, Forbes fired the columnist that endorsed Karatbars, Cointelegraph removed all ads for the company and went on to claim Karatbars had breached its terms of services, and CCN quietly erased any presence of Karatbars from its articles. 

How did Karatbars get to this point? 

Harald Seiz, Josip Heit, Alex Bodi, and Ovidiu Toma have made Bold Claims 

Karatbars International and its founders, Harald Seiz, Josip Heit, Alex Bodi, and Ovidiu Toma, have made bold claims on what they can deliver to the investors of the cryptocurrency issued by the company. KaratGold Coins (KBC) are supposed to be backed by real gold, and both official Karatbars statements and the statements of the company’s CEO, Harald Seiz, regularly affirm these claims. 

At varying points, different gold amounts have been touted to be convertible against KBC. The first major incident was the Gold Independence Day, a major event sponsored by Karatbars International, where the company claimed all KBC would be converted to 1 gram of gold. This was an incredible promise as 12 billion KBC have been minted and backing all this cryptocurrency with real gold would need 12 billion grams of bullion, which is valued at over 577 billion USD. In fact, this much gold is equal to a tenth of all gold reserves on Earth. 

The event happened and no gold was delivered, leaving investors enraged, and cryptocurrency media titles hungry for news. 

Karatbars Dubai Event: Even more Gold

In an event held earlier this year, Karatbars International attended an audience of thousands of investors in Dubai. 

Karatbars International and its founders, Harald Seiz, Josip Heit, Alex Bodi, and Ovidiu Toma, pitches the company and KBC. Various claims were made at this event, including a valuation target for $200 billion for KBC. This figure is greater than the valuation of Bitcoin, the most well-known cryptocurrency in the world. However, Karatbars made other, even more grand claims. 

The company reverted the claim of KBC being backed by 1 gram of gold and suggested that will instead be backed by 1 kilogram of gold. To put this into clarity, 12 billion KBC would be backed by 12 billion kilograms of gold, as per the word of Karatbars’ officials. Interestingly, the entire gold supply on Earth is less than 156 million kilograms. 

The event in dubai was held mid-second quarter and Karatbars now faces the dilemma of results, which have fallen far short of promises. Neither KBC is valued at $200 billion nor has the company muscled a means to deliver 12 billion kilograms of gold. To make matters worse, any entities associated with the KBC’s price and trade have issued severe warnings. CoinMarketCap and CoinGecko warn that the Netherlands authorities have issued concerning statements about Karatbars, and CoinGecko further states that KBC is washtraded, a form of volume misrepresentation used to feign token demand. 

HitBTC, the leading exchange for KBC, a listing that Karatbars International once revelled, has now delisted the coin. As the story unfolds, investors wait, hoping to be paid their 12 billion kilograms of gold. 

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