Lending platforms are the latest craze in the initial coin offering ecosystem, and are currently launching in droves. These platforms can be somewhat complex, and are difficult to understand even in the best cases due to the intentionally confusing marketing they use to obfuscate the specifics of their operation.
Put simply, cryptocurrency lending platforms work like this: investors deposit capital into an account, which is then used to fund aggressive, speculative trading ventures or trading bots. These platforms essentially function in a similar manner to traditional managed investment funds, albeit with far less oversight and regulation.
Lending ICOs operate in a similar manner, but instead of asking investors to directly deposit capital, they instead present the platform as an initial coin offering opportunity. Purchasing tokens on these platforms functions in the same way as depositing funds into an investment account.
These platforms typically offer extremely high returns, but it’s important to check the fine print. Often lending platforms catch unsuspecting investors with lengthy capital return timeframes or high withdrawal fees.
Ultimately, lending platforms can be considered to be a variation on high yield investment programs, or HYIPs. High yield investment programs have a reputation for losing investor money. Less reputable HYIPs commonly use new investor capital to pay out withdrawal requests from legacy investors, which inevitably results in the collapse of the entire program.
Not all high yield investment programs or lending platforms are inherently bad- there are many platforms that provide reliable ROI- but it’s important to remain aware of the risks involved in investing in these kinds of platforms. While a lending platform may appear to be a good ICO investment opportunity, it’s essentially a variation on traditional high risk, high return managed investment funds.
In this article, we’ll be assessing LendConnect, a new lending platform “initial coin offering”. We’ll take a look at the LendConnect offering and examine the promises it makes to help you make an informed decision on whether it’s worth the risk.
What is LendConnect?
LendConnect is yet another cryptocurrency based lending platform that promises extremely high returns in a short period of time. While the presentation of the LendConnect platform is less slick than other lending platforms on the market today, it does present a number of promises that aren't found in other offerings.
The LendConnect platform promises to provide English speaking support to investors, and claims to be backed up by high end hardware and software. The platform also offers a dedicated community manager, the ability for investors to “control their own coins”, fast support, unlocked wallets, and DDoS proof servers.
The LendConnect platform does throw up a number of red flags that make it a less than ideal lending platform. Firstly, the creators of the LendConnect platform don’t provide any details regarding who they are, and even state themselves that they are unable to prove that they are not a scam.
The white paper of the LendConnect platform is also littered with poor English grammar- if the platform creators can’t create an effective, quality ICO whitepaper, how can they be expected to generate profits by investing your cryptocurrency for you?
Most worryingly, however, the LendConnect platform doesn’t provide any details whatsoever regarding their investment strategy or how investor funds will be used. It’s entirely possible that investor funds will simply disappear.
The LendConnect ICO
The LendConnect ICO will launch on the 29th of November 2017, and will make 4 million LCT tokens available for four weeks. In the first week of the ICO, LCT tokens will be priced at$ 0.60 USD, moving to $0.75 USD in the second week, and $0.90 in the third. In the fourth and final week of the LendConnect ICO, LCT will be priced at $1.10 USD.
The LendConnect Verdict
Overall, the LendConnect is a dubious lending ICO that doesn’t instill any confidence in potential investors. If you’re considering investing in the LendConnect platform, make sure you factor in the high level of risk associated with this type of investment.