4 ms·

Is there any advantage over existing systems either for the lender or the debtor?

intotheabyss 5y ago
Huge advantages for both. For example, something that's only possible on a blockchain is a flashloan. This is where you can get a loan for any amount (liquidity provided) as long as you repay the full loan amount in the same block. This primitive alone allows for much higher velocities of money since value can be moved and repayed in a single block (on the order of 10 seconds). All of the advantages of defi boil down to increases in velocity of money. For example you can deposit funds into a contract and receive a token that represents your liquidity position. You can then use this token in other applications. So now you have this composability of money which allows people to create new financial primitives.
- jayd16 5y ago
  Who is giving out 10 second loans and why would they do that?
- SmellTheGlove 5y ago
  OK but why and for what purpose?
  - SubiculumCode 5y ago
    THETA->Super Hi Def video streaming https://www.thetatoken.org/ https://www.thetatoken.org/ VET-> Supply Chain Authentication for Businesses https://www.vechain.org/ https://www.vechain.org/ Are two real world examples that are starting to see adoption. Also this articles covers it well: https://101blockchains.com/practical-blockchain-use-cases/ https://101blockchains.com/practical-blockchain-use-cases/
    - leifg 5y ago
      I am an engineer for more than 12 years. I think I have a reasonably good idea of how a blockchain works. I have no idea how these two projects are supposed to work. Who is supposed to use this if there isn't even a concise description of the product? Judging by their Twitter accounts both of these companies have been around since 2017. How many active users do they have?
      - SubiculumCode 5y ago
        https://www.youtube.com/watch?v=hf-Op-1peZI https://www.youtube.com/watch?v=hf-Op-1peZI for less formal overview https://www.thetatoken.org/ https://www.thetatoken.org/ contains white papers if you want the technicals.
        jethro_tell 5y ago
        I think he's asking if anyone has found this useful in 5 years? Are there actual customers or is this just an idea?
        SubiculumCode 5y ago
        A couple of things. First these are companies that are building up. They are not fully instituted. Second they have many partners that are helping them build out. As far as customers, yes both THETA and VET have customers....including some .gov customers.
- matkoniecz 5y ago
  > This is where you can get a loan for any amount (liquidity provided) as long as you repay the full loan amount in the same block. What is the point of that? > So now you have this composability of money which allows people to create new financial primitives. Are there any useful for anything beyond gambling/speculation/NFT-like FOMO-powered bubbles?
  - barneysversion 5y ago
    >> This is where you can get a loan for any amount (liquidity provided) as long as you repay the full loan amount in the same block. > What is the point of that? Leveraging arbitrage
    - matkoniecz 5y ago
      "This primitive alone allows for much higher velocities of money since value can be moved and repayed in a single block (on the order of 10 seconds)." what can be usefully arbitraged in that time in way that guarantees no loss?
      - exo762 5y ago
        It's actually way funnier than GOP presets to be. Flashloan must be paid back in the same transaction. Since whole thing happens in the same tx, it's atomic. So you can use smart-contract logic to determine if you are actually making a profit, and if you are not - revert!
      - wmf 5y ago
        Exploiting contract bugs.
puranjay 5y ago
Non custodial, trustless loans mean I can get a loan against my existing assets without ever interacting with any individual or being subject to scrutiny. A single smart contract can do the job of entire banks.

Huge advantages for both. For example, something that's only possible on a blockchain is a flashloan. This is where you can get a loan for any amount (liquidity provided) as long as you repay the full loan amount in the same block. This primitive alone allows for much higher velocities of money since value can be moved and repayed in a single block (on the order of 10 seconds). All of the advantages of defi boil down to increases in velocity of money. For example you can deposit funds into a contract and receive a token that represents your liquidity position. You can then use this token in other applications. So now you have this composability of money which allows people to create new financial primitives.

jayd16 5y ago
Who is giving out 10 second loans and why would they do that?
SmellTheGlove 5y ago
OK but why and for what purpose?
- SubiculumCode 5y ago
  THETA->Super Hi Def video streaming https://www.thetatoken.org/ https://www.thetatoken.org/ VET-> Supply Chain Authentication for Businesses https://www.vechain.org/ https://www.vechain.org/ Are two real world examples that are starting to see adoption. Also this articles covers it well: https://101blockchains.com/practical-blockchain-use-cases/ https://101blockchains.com/practical-blockchain-use-cases/
  - leifg 5y ago
    I am an engineer for more than 12 years. I think I have a reasonably good idea of how a blockchain works. I have no idea how these two projects are supposed to work. Who is supposed to use this if there isn't even a concise description of the product? Judging by their Twitter accounts both of these companies have been around since 2017. How many active users do they have?
    - SubiculumCode 5y ago
      https://www.youtube.com/watch?v=hf-Op-1peZI https://www.youtube.com/watch?v=hf-Op-1peZI for less formal overview https://www.thetatoken.org/ https://www.thetatoken.org/ contains white papers if you want the technicals.
      - jethro_tell 5y ago
        I think he's asking if anyone has found this useful in 5 years? Are there actual customers or is this just an idea?
        SubiculumCode 5y ago
        A couple of things. First these are companies that are building up. They are not fully instituted. Second they have many partners that are helping them build out. As far as customers, yes both THETA and VET have customers....including some .gov customers.
matkoniecz 5y ago
> This is where you can get a loan for any amount (liquidity provided) as long as you repay the full loan amount in the same block. What is the point of that? > So now you have this composability of money which allows people to create new financial primitives. Are there any useful for anything beyond gambling/speculation/NFT-like FOMO-powered bubbles?
- barneysversion 5y ago
  >> This is where you can get a loan for any amount (liquidity provided) as long as you repay the full loan amount in the same block. > What is the point of that? Leveraging arbitrage
  - matkoniecz 5y ago
    "This primitive alone allows for much higher velocities of money since value can be moved and repayed in a single block (on the order of 10 seconds)." what can be usefully arbitraged in that time in way that guarantees no loss?
    - exo762 5y ago
      It's actually way funnier than GOP presets to be. Flashloan must be paid back in the same transaction. Since whole thing happens in the same tx, it's atomic. So you can use smart-contract logic to determine if you are actually making a profit, and if you are not - revert!
    - wmf 5y ago
      Exploiting contract bugs.

puranjay 5y ago

Non custodial, trustless loans mean I can get a loan against my existing assets without ever interacting with any individual or being subject to scrutiny. A single smart contract can do the job of entire banks.