On the 22nd of March we launched a new mechanism for accepting loan applications on Biterest. The borrower now provides collateral after the loan application is accepted by the lender.
In the previous version, the borrower was required to transfer the necessary amount of bitcoin as collateral in order to complete the process of creating a loan application. Only after that is the application published on Biterest and made available to potential lenders.
The borrower now needs to top up the transaction fee balance. The transaction fee ensures that the borrower doesn't place false loan applications and acts as assurance that the user has the required amount of bitcoins for loan collateral. The fee is debited from the balance every time the borrower places a loan application. It depends on the requested loan amount and loan period. The fee is equal to 0.5% per annum based on the number of loan days. For example, the amount of your loan is $ 1000, the period is 90 days, the transaction fee is equal to $ 1.23.
The application will be published on Biterest and become available for creditors after transferring the transaction fee by clicking the button “Publish the loan application”. If the borrower changes their mind about applying, they can cancel the application at any time. The transaction fee will be refunded to the balance.
Once the lender accepts the loan application, the borrower will be notified via email. Only after that the borrower will have to provide the application with collateral. Within next 24 hours the borrower needs to transfer the necessary amount of BTC to the multisig-address created by Biterest. Learn more about multisig-addresses and how they are used to safely store your bitcoins at https://biterest.com/en/blog/how-to-protect-bitcoins-from-theft.
After that, the borrower's payment details will become available to the lender. The loan period starts at the moment the lender confirms the money transfer, clicking the button "I have sent money to the borrower!".
The current version of the mechanics is described at this link: https://biterest.com/support/3/1Tweet