So I assume this is being posted because Pebble was the company that is accused of ripping off Eco? >“If you’re lending without collateral, there’s a huge risk

So I assume this is being posted because Pebble was the company that is accused of ripping off Eco? >“If you’re lending without collateral, there’s a huge risk, because [the borrower] is not putting down an asset,” Bai said. “Fortunately, because [Pebble’s borrowers] are putting $1,500 down, say, on a user’s $1,000 deposit, there is an asset. So even if the borrower fails to pay, we can liquidate their assets.” Let's run the scenario shall we. I put down $1500 worth of BTC and you give me $1000 USDC. I go off and spend it on BTC. Because duh - the only reason I would want to borrow USDC is to buy crypto. Now, what scenario am I ever going to fail to pay you back? Well, the only scenario is if BTC crashes and I can't sell my BTC to pay you back your USDC. Oh no! But you're smart - you've taken collateral. But wait, you took collateral in BTC. So your collateral is perfectly correlated with the cause of default. The only case where your collateral matters is the case where it's unlikely to cover the loan. What I find really funny about this is that it's this perfect mix of two things: The interest rates are higher than you can get from pretty much any savings account (because it's not a savings account), it's also catastrophically lower than the risk you're taking on. Like, if you really wanted to participate in this you should be asking for loanshark-like yeilds not 5%.