![Celsius Network team](https://coinjournal.net/wp-content/uploads/2017/10/Celsius-Network-team-696x561.jpg)
A new peer-to-peer lending platform is set to hit the market in the coming months with a product specifically targeted at millennials.
The Celsius Foundation is building a platform on top of the Ethereum blockchain that aims to swap out the big banks and their high fees, and replace them with colleagues, friends, and other ether token holders.
The organization said it will focus its efforts on supporting millennials, “the generation that often suffers the most at the hands of credit lending services.”
“All existing peer-to-peer platforms are centralized solutions that are not solving the credit limit and interest rate cost issues, or are blockchain-based platforms which only serve as exchanges to connect credit starved millennials to the same large financial institutions who will not lend to them in the first place,” Alex Mashinsky, the founder of the Celsius Foundation, told CoinJournal.
“I created Celsius to enable millennials and genX to join the crypto revolution, leverage their social network to create a digital credit score and learn how to earn interest and get loans at much lower rates from their peers.”
![](http://coinjournal.net/wp-content/uploads/2017/10/Celsius-Network-team-1024x825.jpg)
Prior to Celsius, Mashinsky founded several companies including GroundLink, Transit Wireless, Elematics and Arbinet. He is a serial tech entrepreneur with 30+ patents, US$1 billion in raised funds and over US$3 billion in exit deals.
With his new venture, Mashinsky said the purpose is to solve “one of the biggest problems out there for millennials.”
“The banking industry as it is currently formulated fails to offer any real solutions to the current consumer credit and high-interest student debt crisis,” he said. “Banks have no incentive to fix the problem, as the majority of their profits come from these loans.”
“I have six kids and I am very concerned about their ability to succeed in the world where financial credit is harder and harder to get and the costs are growing higher and higher.”
Celsius intends to put credit scores and legacy data onto the blockchain and provide each user with a digital identity and credit scores that includes their social and digital footprint. The process aims to encourage the creation of a community of lenders and borrowers with lower loss factors and higher on-time payments, enabling greater credit limits at lower interest rates.
Celsius will allow members to lend to other members and earn higher interest than they could get with a bank term deposit, while borrowers get lower interest rates than they would pay on bank loans.
A borrower will be able to share with the community information in his or her digital profile to obtain a loan, and the more information he or she provides, the lower the interest rate and higher the credit they will obtain.
The platform will issue each user a credit score based on their digital identity and any other user uploaded data including FICO credit scores and past transaction history on websites such as Amazon and eBay.
In addition, Celsius will provide insurance so that if the borrower defaults, Celsius covers the portion of the principal loan amount for the lender and is responsible to recover the money owed to the lenders.
“Celsius is joining the Bitcoin and Ethereum movements which represent social change and the rejection of centralized institutions as the arbitrators who take our money and then decide what credit and what interest rates we should pay for the capital they borrowed from us while paying us almost nothing for it,” said Mashinsky.
“All existing solutions are not membership based (think of Amazon Prime or Costco) and have ended up partnering or being bought by these monopolies and have not provided the promised peer-to-peer solutions millennials need.”
“We solve few major problems: As a peer lender, how can I keep my ETH and BTC but earn USD interest on it or borrow USD against it? How can I lend my crypto tokens to dollar lenders but keep all the ETH or BTC appreciation during such loan? As a borrower, how can I borrow dollars at a lower rate from a membership organization which will take into account my social graph and creditworthiness?” he said.
“We are also addressing one of the largest problems the crypto community has which is where are the next 100 million adopters are going to come from.”
Mashinsky said the team has a prototype set to be deployed next month and fully working version next year.
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