MyConstant Review

January 29th, 2021
6 minutes read
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Peer-to-Peer lending backed by cryptocurrencies

FAST FACTS

Launch DateMay 2019
Total Investment VolumeUSD 71.5m
Average annual interest4% Flex or up to 11% crypto
Minimum InvestmentNone
Investment FeesNone
Who’s eligible to investAnyone
Investment TypeShort term crypto loans
Secondary MarketNo
Auto Invest FunctionYes, but only in the Flex program
Investor Protection200% Collateral, Buyback Guarantee
CurrenciesUSD, USDC, DAI, USDT, BTC, ETH, BNB+
Website LanguageEnglish

PROS & CONS

Pros

  • Automated liquidity pool investing option
  • No fees for depositing or withdrawing funds
  • Extra membership benefits
  • Overcollateralized loans by 2 to 1
  • Flexible terms
  • The platform is transparent with a Statistics page.

Cons

  • The Membership Benefit tiers require high investment volumes to take effect
  • Complexity due to many lending options
  • EUR and GBP holders must send USD or crypto for deposits
  • Reliance on loan originators for individual loans
  • No secondary market for individual loans not in the Flex program

Pros Explained

  • MyConstant loans your money to borrowers in two ways. They put your funds into a liquidity pool and lend directly from the pool in the Flex program. The 2nd way is the non-Flex p2p program. In the non-Flex program, the individual borrowers are matched with lender funds. They don’t use the liquidity pool of the Flex program. In this program, the platform plays matchmaker on rates and terms between borrowers and lenders in a pure p2p setup.
  • They have a membership program with three tiers with additional benefits called Gold, Platinum and Diamond. Benefits include USD credited to your account or partial interest earned by friends you refer to the platform.
  • The loans you invest in are overcollateralized by 2 to 1. So it’s 2 dollars deposited for every 1 dollar borrowed. This provides a high level of protection for your capital.
  • Flexible terms. You can select 1, 3, or 6 month terms for your money on loans in the p2p program. With the Flex program you can withdraw at any time.
  • The average lender has made ten investments on the platform, per the Statistics page, meaning that lenders are satisfied with how MyConstant works.
  • MyConstant claims a 100% recovery rate when they have to liquidate a loan for non-payment, per the Statistics page.
Overview of MyConstant Statistics

Cons Explained

  • The membership benefit tiers are expensive to reach at a minimum of $25,000 USD lent or borrowed (or combined).
  • No secondary market or other options to exit early from a loan. However, you can withdraw anytime from the Flex program.

Who is MyConstant best for?

MyConstant is a good choice for cryptocurrency investors and those wanting to dip their toes into the new trend of DeFi (Decentralized Finance). It’s also a good choice for those wanting to earn interest in a currency other than their own fiat currency (like USD or EUR). 

MyConstant is not fully decentralized, but you have many options to choose from. You can lend stablecoins like DAI or USDC or cryptocurrencies like BTC, ETH, and BNB. And you can lend whichever crypto you have and receive one of a couple of different interest rates based on which crypto you receive. The highest paying crypto is the PRV privacy token that pays 11%.

What does MyConstant Offer?

MyConstant offers loans in USD, stablecoins, or cryptocurrencies. Rates differ based on which you deposit into the platform or liquidity pool and which crypto you want to receive for your payments. Borrowers can be from anywhere and put up 2x the amount they want to borrow in cryptocurrency for 1, 3, or 6 months.

The Flex program is automated lending while other loans are funded on a p2p matching basis from loan originators. Loan agreements are powered by Ethereum smart contract technology. A smart contract is a self-executing contract where the terms of the contract are determined in advance and coded into the agreement. If the terms are not satisfied, then the code reverts to prior to the agreement meaning the lender gets their collateral back, but the borrower loses theirs.

Who is Behind MyConstant?

The team behind MyConstant is based in four countries: the US, Vietnam, Malta, and Hong Kong. The business started by developing its own stablecoin. Once they learned the value of stablecoins, they saw these coins as high-quality digital asset collateral for a lending business, which started in the spring of 2019. The goal is to be a transnational, decentralized, p2p lending platform.

An important note is that MyConstant does not charge fees to lenders. They make money by charging a 2.5% origination fee, a fee for early repayment of the loan and a small spread on the interest rate charged. For example, you might agree to charge 7% for a loan, but the platform will charge the borrower 7.5% and earn on that 50 basis point spread.

How Much Can You Earn?

Interest rates vary tremendously based on if you receive your interest payments in DAI, USDC, USD, BTC or another cryptocurrency. Rates start at 4% and go up to 11% if you accept the PRV privacy token.

Image of MyConstant interest rates compared to traditional bank competitors

How to Invest on MyConstant

Two options are available. You can either:

  1. Join the Flex program and earn 4% lending on the Compound Finance DeFi platform OR
  2. Earn up to 11% lending your cryptocurrency or dollars to individual borrowers on the platform brought in through loan originators. The loan originators have ratings that you can look at as well as borrower information to base your investment decisions.

Summary

MyConstant offers a true p2p experience with crypto as well as automated lending provided by the Compound DeFi platform. Rates are competitive versus USD or EUR markets due to the over-collateralization of 2 to 1. The interest rates still beat bank accounts. In fact, MyConstant rates beat some USD, GBP or EUR p2p lending rates for the best credits without credit checks or geographical limitations due to the loan being collateralized by cryptocurrency.

The flexibility of

  • choosing loans individually at higher rates
  • lower rates for automated investing through Compound
  • different deposit options and
  • different options for how to receive your payments

are some of MyConstant’s most interesting features. For example, a lender who is bullish on Bitcoin or Ethereum can lend USD or a stablecoin like DAI but receive payments in BTC or ETH if they can find a borrower willing to repay in that cryptocurrency.

Methodology

At P2PMarketData we are dedicated to providing unbiased reviews of peer-to-peer lending, real estate crowdfunding and crypto lending platforms. Among other, in our mission to bring more transparency to the market we closely monitor and track over 70 platforms funding volumes.

When reviewing an alternative investment platform, we consider a variety of factors such as:

  • Number of investors
  • Minimum investment requirement
  • Historical annual returns
  • Diversification opportunities
  • Reinvestment opportunities
  • Educational and informational offerings
  • Platform fees
  • Total capital invested
  • Features (such as secondary market and automatic investing)
  • General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
  • Management team

We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).