The problem is trust: why would anyone trust anything other than THE third party guarantor, who has enough available capital and an established reputation for p

The problem is trust: why would anyone trust anything other than THE third party guarantor, who has enough available capital and an established reputation for providing recourse? Would you ever trust some random, small-time agent to collaterize a smart contract you're involved in? That's obviously foolish. Even trusting a mid-size agent is foolish. You don't know how these people are operating, and whether they might go insolvent the very next day. This is one of the primary reasons we have large, regulated, centralized institutions in the first place.