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.

Totally on point! A solid middle layer is key for scaling UCL lending. Let's make it happen! 🚀💸