Cryptoknowmics
2022-04-16 14:00:07

Undercollateralized Loans in DeFi – Why the future of lending is decentralized?

Since gaining prominence in recent years, cryptocurrency has significantly impacted the global financial market, especially with the development of decentralized finance (DeFi) and cryptocurrency loans. Today, multiple independent financial platforms provide various sorts of crypto loan services, which offer considerable benefits to borrowers and lenders alike. For 1.7 billion individuals worldwide, traditional credit markets are still mostly inaccessible. To begin, you’d need a credit score and assets (collateral) or income to entice the banks’ credit assessors. Without even mentioning the enormous red tape and long loan approval processes by traditional banks. To remove these limitations, decentralized lending platforms like Aave (AAVE), Compound (COMP), and Maker (MKR) allow anybody anywhere to acquire loans (MKR). There’s no need for bank accounts or lengthy credit checks with the initial generation of decentralized lending protocols. But there is a problem with this type of trustless, overcollateralized loan – collaterals. Underbanked or unbanked users can’t afford (or don’t have) the requisite crypto collateral. We need a new solution for these individuals – uncollateralized crypto loans are the answer. The Birth of DeFi Lending with Overcollaterized Loans With no third parties and no KYC processes, decentralized money marketplaces like Aave run trustlessly. DeFi loans are heavily overcollateralized to preserve their tru...

获取加密通讯
阅读免责声明 : 此处提供的所有内容我们的网站,超链接网站,相关应用程序,论坛,博客,社交媒体帐户和其他平台(“网站”)仅供您提供一般信息,从第三方采购。 我们不对与我们的内容有任何形式的保证,包括但不限于准确性和更新性。 我们提供的内容中没有任何内容构成财务建议,法律建议或任何其他形式的建议,以满足您对任何目的的特定依赖。 任何使用或依赖我们的内容完全由您自行承担风险和自由裁量权。 在依赖它们之前,您应该进行自己的研究,审查,分析和验证我们的内容。 交易是一项高风险的活动,可能导致重大损失,因此请在做出任何决定之前咨询您的财务顾问。 我们网站上的任何内容均不构成招揽或要约