Competitive Landscape
The competitive analysis highlights how FERO CASH's Instant Crypto-backed Loans stand out compared to alternative products and services.
Last updated
The competitive analysis highlights how FERO CASH's Instant Crypto-backed Loans stand out compared to alternative products and services.
Last updated
The FERO CASH Instant Crypto-backed Loan allows customers to retain 100% ownership of their crypto assets and benefit from their potential value appreciation. Additionally, the FERO CASH product is accessible without credit checks and is not subject to any geographic restrictions. The crypto loan is granted instantly, as there is no approval process. Once the crypto assets are transferred into the FERO CASH Protocol and the transaction is confirmed on the blockchain, the customer can proceed with the FEUSD loan withdrawal. The interest rates are highly competitive, and there are no additional or hidden fees.
FERO CASH's direct competitors are other DeFi platforms that offer stable cryptocurrencies and decentralized lending. Unlike many of these platforms, which are simply P2P lending marketplaces for secured and unsecured loans and do not offer fiat withdrawals, FERO CASH enables fast and automated fiat currency payouts.
The application process at FERO CASH is instant and automatic, saving significant time compared to the slow, manual matching on platforms like SALT. SALT requires manual matching between lenders and borrowers, which slows down the process, while Maker follows an automated but still less flexible approach.
FERO CASH offers flexible loan options with no additional fees, whereas SALT charges membership fees. Additionally, collateral release at FERO CASH occurs immediately after repayment, unlike SALT, where the release may be delayed as requests are processed only once every 24 hours.
Finally, FERO CASH offers a wider variety of repayment options in cryptocurrencies (FEUSD, USDT, USDC) compared to SALT, which only supports USD, and Maker, which uses DAI. FERO CASH is designed to provide customers with a seamless and efficient financing solution that revitalizes the crypto lending market.
Assumptions:
Assume the client owns Bitcoins and needs fiat money to cover a financial need of any kind. Specifically, let’s assume the following portfolio:
Assets: 1 BTC, originally purchased for 30,000 USD
Required Financing: 20,000 USD
Current BTC Price: 60,000 USD (Net worth = 1 BTC x 60,000 USD = 60,000 USD)
Duration of Required Fiat Financing: 60 days
Taxation: Capital gains tax in case of sale
The client is looking for short-term financing of 20,000 USD for 60 days and wants to remain the owner of the 1 BTC while minimizing costs.
Financing Options:
FERO CASH Instant Crypto-backed Loan The client takes an instant loan of 20,000 USD with no credit check required. They transfer 1 BTC (worth 60,000 USD) to the FERO CASH protocol and receive FEUSD, which can be converted to fiat currency via bank transfer or credit card. With this strategy, the client only pays interest and small transaction or deposit fees. No capital gains tax is due because the assets are not sold.
Sell and Buy Back Option The client sells approximately 0.333 BTC (20,000 USD / 60,000 USD) today to receive 20,000 USD and plans to buy the same amount back in 60 days at the future price. Since the BTC was originally purchased for 30,000 USD, they will incur capital gains tax. Additionally, there is the risk that the buyback price could change due to market fluctuations, leading to higher or lower costs.
Sell and Margin Lending The client sells 0.333 BTC today for 20,000 USD and keeps the remaining 0.667 BTC. They use a portion of the remaining BTC to open a 3.33x margin position to replicate ownership of 1 BTC. This incurs additional costs due to margin and trading fees, and the client is exposed to the risks of market volatility and margin trading.
Futures and Swaps The client sells 0.333 BTC for 20,000 USD and opens a futures or swap position to replicate ownership of 1 BTC with a 3.33x leverage. This strategy is risky and speculative, as it may incur additional fees and interest for maintaining the position.
Net Worth Summary with BTC Price Change:
Constant BTC Price (60,000 USD): The FERO CASH instant loan remains the most cost-effective option, as no capital gains tax is incurred and only interest must be paid.
BTC Price Increase by 20% (to 72,000 USD): The client benefits from an additional gain of 12,000 USD (20% of 60,000 USD), while still owning 1 BTC.
BTC Price Decrease by 20% (to 48,000 USD): The value of 1 BTC would drop to 48,000 USD, but the client retains their Bitcoin without risk of liquidation or margin calls.
Net Worth Summary with BTC Price Change:
If the Bitcoin price remains constant, the FERO CASH instant loan is seven times cheaper than the sell and buy back option. The costs are based on the price structures of several major cryptocurrency exchanges. The sell and buy back option includes fees such as platform usage, bid-ask spread, withdrawal and transaction (miner) fees, and capital gains tax on crypto sales, whereas FERO CASH only incurs interest. If the Bitcoin price increases while the client uses the FERO CASH loan, they will still benefit from ownership (a 20% price increase results in an additional gain of 12,000 USD).
The sell and margin option is 7.8 times more expensive than a FERO CASH instant loan. Although the client retains the possibility of price appreciation with margin trading, they are exposed to the following risks:
Market Volatility: Margin trading carries significant loss risks and requires specialized technical knowledge.
Margin Calls: On platforms like Kraken, an investor receives a margin call at 80% of the invested funds and their position is liquidated at 40%. In this example, the client would receive a margin call once the Bitcoin price drops by 6% and be liquidated if the price falls by 18%.
Trading swaps and futures is more than ten times more expensive than a FERO CASH instant loan. Furthermore, derivatives trading is complex and can lead to losses exceeding the initial investment. In a swap/forward scenario, liquidation would begin once the Bitcoin price falls by 15%.
The cost efficiency of FERO CASH instant loans, the flexibility of available funds, and the retention of ownership of digital assets make FERO CASH the better choice for instantly unlocking the value of digital assets.
FERO CASH stands out compared to both direct and indirect competitors through the following key advantages:
Speed: FERO CASH offers an instant and automatic application process, making funds available much faster than platforms like SALT, which require manual matching between lenders and borrowers. In comparison to Maker, FERO CASH's application process is also more efficient, as Maker often experiences delays due to liquidity fluctuations despite automated processes.
Costs: FERO CASH does not charge additional fees such as membership or application fees, which can be incurred on other platforms. This provides a clear cost advantage over platforms that charge membership fees. The platform remains more affordable for users, as the only costs involved are the interest payments. Other platforms impose additional charges through trading, deposit, or withdrawal fees.
Fiat Withdrawals: Unlike most DeFi platforms that do not offer direct payouts in fiat currencies, FERO CASH enables quick and straightforward fiat withdrawals. This is a significant advantage over competitors like SALT and Maker, which are based on USD and DAI and do not offer fiat integration.
Flexibility: FERO CASH's flexible loan options, available without strict requirements or fees, provide high adaptability for users. Collateral is released immediately after repayment, which can be problematic for SALT due to manual checks and time delays. Additionally, FERO CASH offers a wider range of repayment options and plans to introduce a free credit card, providing users with even more benefits.
