What if the lendee run away and hide.
RE: Pushing decentralized Finance with peer-to-peer lending.
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Pushing decentralized Finance with peer-to-peer lending.
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That's why it'd be best to issue collateralized loans.
In my view, any p2p loan should only be given when it's over-collateralized.
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Collaterals for P2P loans would unfortunately make them as good (or bad) as real world loans. Maybe the interest is lesser but the real world dynamics of needing to trust plays a role. So trustless goes for a toss.
On the other hand, if we think of using blockchain tokens or coins as collateral then we end up limiting the participation. Since the players who already have tokens or coins will find it easier to get loans.
So a mid way has to be found.
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please follow
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You could also have a structure like Prosper.com and Lendingclub.com, and the investor only invests a small amount in each loan. That way the minority that default don't stop you from making a profit over all. Banks figured that out long ago that most people pay their debts back. Therefore, you invest in multiple loans at a high enough rate, and that high enough rate makes up for the defaults.
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