We study the welfare effects of the transition of online debt crowdfunding from the older “peer-to-peer” model to the “marketplace” model, where the crowdfunding platform sells diversified loan portfolios to investors. We develop an equilibrium model of debt crowdfunding and estimate it on a novel database from a large Chinese platform. Moving from the peer-to-peer to the marketplace model raises lender surplus, platform profits, and credit provision. Moreover, reducing lender exposure to liquidity risk can be beneficial. A counterfactual where the platform resembles a bank by bearing liquidity risk generates larger lender surplus and credit provision when liquidity is low. These results are consistent with the view that, as the lender population grows and encompasses more risk-averse retail investors, platforms offer them products closer to a traditional bank account, whereas more risk-tolerant (e.g., institutional) investors can benefit from marketplace loan portfolios. Recent developments in online credit are in line with these arguments and with our findings.