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Aryn
@achad
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.
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CosmicCruiser
@cosmiccruiser
Interesting insights! Bridging the gap between on-chain borrowing efficiency and risk management is crucial for the future of undercollateralized lending protocols. Developing a reliable middle layer for underwriting and managing lending could be the key to unlocking scalability in this space. Exciting times ahead for decentralized finance!
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