The Ether Loan dapp is in the public blockchain, and was not created by this website.
Ether Loans is a Verified Dapp with Source Code visible to everyone. All transactions are shown on the Event Log Explorer.

The Ether Loans Dapp allows Lenders to earn a fixed income on their ETH, and Borrowers to pay an interest rate to receive the earnings if the ETH/USD price increases.
  1. The Lender posts an Offer to give all the potential earnings of their Starting ETH, in exchange for Interest that is paid by the Borrower.
    The Lender must deposit their Starting ETH into the contract.
  2. When the Borrower accepts the Offer, they must deposit Prepaid Interest for the number of days indicated by the Lender.
  3. The Borrower can also post an Offer, which will have a greater chance of being accepted by a Lender if they propose a higher Interest rate.
  4. The Lender or Borrower can exit the agreement, and withdraw their remaining balance, at any time.
    The Loan End does not occur until either party exits the agreement.
    Therefore, when the Borrower's Prepaid Interest runs out, it is the Lender's responsibility to exit the agreement.
If the ETH/USD price goes UP, then the Borrower receives Appreciation in the form of Extra ETH received from the Lender.
The Lender's Ending ETH will cause the Lender's USD value to remain unchanged. The Lender's Net Income is received from the Interest paid by the Borrower.

If the ETH/USD price goes DOWN, then the Borrower receives no Appreciation, and they incur the loss of the Interest that they paid.
The Lender's Ending ETH will remain unchanged, and their Net Income will be equal to the Interest they earned, minus the Depreciation of the ETH/USD price.
The Borrower has no downside risk, other than the interest they pay to the Lender.

Interest is paid by the Second (in ETH), 1/60 of a minute, by dividing the APR by 31,536,000. This allows for very short-term loans.
This calculation is not adjusted for leap years, so the interest paid during an entire leap year is approximately .2% higher than the APR shown.

These rules are similar to standard Call Options, with the following differences:
  1. There is no expiration date. The Lender or Borrower can exit the agreement, and withdraw their remaining balance, at any time.
  2. There is no fixed Premium USD Value. The Premium is a prepaid percentage paid in ETH. The USD value of the Premium can change during the term of the loan.
  3. The Starting ETH and Interest (APR) are entirely variable, unlike Call Options which give you a finite number of choices.
The Ether Loans Dapp does not currently charge any transaction fees. If transaction fees are added in the future, those fees will only pertain to loans that are created after fees are added to the Dapp.
EXAMPLES: The following links will change the parameters in the Loan Simulator (below), to demonstrate several scenarios.

Borrower Can Leverage Their Investment, With No Downside Risk: If you own 10 ETH that goes up 33% in ETH/USD in one year, you only make $500 profit.
However, if you receive the equity of 100 ETH during 1 year, then you make $3,000 profit, with no loss if the price goes down (other than interest paid).

Conservative Lender: Rather than earning just 2.5% in a standard money market account, the Conservative Lender would rather earn 15%.
This example shows how the Conservative Lender would earn $3,700 more than the Borrower, if ETH only went up $20 (11.7%) in one year.

Borrower Hedges His Investment: The Borrower can risk a small percentage of the ETH cost, and still receive all the Appreciation.
In this example, ETH goes down $20 in one month, and the Borrower only loses $127.40. He would have lost $2,000 if he had paid the entire ETH cost.

Short-term Gambler: Instead of betting on sports, this Borrower offered 1,000% to a Lender for 6 hours.
The ETH/USD price would have to go up at least $2 in 6 hours for him to make a profit. The Lender made 10% more than if he hadn't charged the 1000% percent.

Loan Simulator Use 2 Ropsten Test Network accounts to experiment, before using real ETH.

Loan Terms Loan Start Loan End Lender Result Borrower Result
Starting ETH Interest (APR) Month Day Year Time ETH/USD Month Day Year Time ETH/USD Ending ETH Interest Depreciation Net Income Interest Appreciation Net Income