4 ms·

Accepting tokens isn't the issue. The issue is you can't put up the house you're going to buy as collateral for a DeFi loan. You need to have other crypto asset

by ahtihn 4y ago

Accepting tokens isn't the issue. The issue is you can't put up the house you're going to buy as collateral for a DeFi loan. You need to have other crypto assets worth 1.5x or more than the house you're going to buy.

latchkey 4y ago
> The issue is you can't put up the house you're going to buy as collateral for a DeFi loan. Of course not, you don't own it.
- xnorswap 4y ago
  Do you understand what a mortgage is? You put up the house you're buying as collateral for a loan for the money you're using to buy the house.
  - latchkey 4y ago
    Sorry, I guess my word timing sarcasm was missed. You kind of have to buy the house and get the mortgage at the same time. "going to buy" was said multiple times, which implies that the house wasn't purchased yet.
    - xnorswap 4y ago
      Well this is why having humans in the loop is an advantage, so you get an Agreement in Principle to move the process forward. Also, we're back to the fundamental problem which is that you can't use a house as collateral on the blockchain but you can in the real world. There are also things like leveraged buyouts of companies which operate on a similar principle. The capital for the buyout is fronted by a bank loan secured against the company being bought. And again, there's no timing issue because humans can understand there isn't really a sequencing issue and one party isn't going to just disappear with the funds halfway through the process, and everything is reversible through banking and / or the courts.
      - latchkey 4y ago
        > Also, we're back to the fundamental problem Is it really a problem?
- piaste 4y ago
  Just to be clear, are you being intentionally dense? It's by far the most common type of loan a private citizen is likely to need. I want to buy an asset, I take a loan and use the money to buy the asset, if I don't repay the loan the creditor takes the asset. I don't need to have 1.5x the value of the assets in anything to get such a loan. I just need to convince the creditor that (a) I am likely to eventually repay the loan, and (b) that the resale value of the asset will be sufficient to cover the loan if I don't pay. If DeFi loans can't handle this scenario, as far as 99% of the population is concerned they're not loans at all.

by ahtihn 4y ago

latchkey 4y ago

> The issue is you can't put up the house you're going to buy as collateral for a DeFi loan. Of course not, you don't own it.

xnorswap 4y ago
Do you understand what a mortgage is? You put up the house you're buying as collateral for a loan for the money you're using to buy the house.
- latchkey 4y ago
  Sorry, I guess my word timing sarcasm was missed. You kind of have to buy the house and get the mortgage at the same time. "going to buy" was said multiple times, which implies that the house wasn't purchased yet.
  - xnorswap 4y ago
    Well this is why having humans in the loop is an advantage, so you get an Agreement in Principle to move the process forward. Also, we're back to the fundamental problem which is that you can't use a house as collateral on the blockchain but you can in the real world. There are also things like leveraged buyouts of companies which operate on a similar principle. The capital for the buyout is fronted by a bank loan secured against the company being bought. And again, there's no timing issue because humans can understand there isn't really a sequencing issue and one party isn't going to just disappear with the funds halfway through the process, and everything is reversible through banking and / or the courts.
    - latchkey 4y ago
      > Also, we're back to the fundamental problem Is it really a problem?
piaste 4y ago
Just to be clear, are you being intentionally dense? It's by far the most common type of loan a private citizen is likely to need. I want to buy an asset, I take a loan and use the money to buy the asset, if I don't repay the loan the creditor takes the asset. I don't need to have 1.5x the value of the assets in anything to get such a loan. I just need to convince the creditor that (a) I am likely to eventually repay the loan, and (b) that the resale value of the asset will be sufficient to cover the loan if I don't pay. If DeFi loans can't handle this scenario, as far as 99% of the population is concerned they're not loans at all.