crypto

I actually think gearbox is actually a pretty good design for undercollateralized loans. There's a select few strong use cases in defi, and so integrating these into a closed system to allow for undercollateralized loans is great. 

One thing I've been thinking of is expanding this using IBC to make these undercollateralized loans more flexible. You can allow any user to use your undercolalteralized loans to any chain connected to you through ibc. If loans become unhealthy the protocol can send an ibc message to close out all their positions on the chain and return funds back to the lender.

Undercollateralized lending proliferation on chain is inevitable. I think 2 things need to happen to get there. 

1) We need a wedge product to prove to users that on chain borrowing can be cheaper and more efficient while proving to lenders that defaults don’t significantly change when the money transfer rails are changed. 

2) Someone needs to create a middle layer between liquidity providers and borrowers that underwrites the risk and manages lending. Unlike Aave’s and Morpho’s of the world, undercollatoralized protocols can’t scale vertically until there’s a way to delink off-chain management of debt from the lending marketplace itself.

so basically add kyc to lending so you can sue them legally as a corpo?

dev (not french) @ le /bleu @elefant. 


lebleuelefant.com

yep only way to do so. I think its pretty funny that we've come full circle in less than 20 years.

hey at least we could try and make a more -levelling- playing field. rn small credits is mostly a predatory business on the poor.

instead of a real resource for them to build up, it just keeps them digging their own financial hole