RE: USD-Pegged Loans in Decentralized Lending Review

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USD-Pegged Loans in Decentralized Lending Review

in ethereum •  7 years ago 

What if the borrower does not pay back?

ethereum
7 years ago by

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      ·  7 years ago 

    The collateral system that is in place and reinforced by way of smart contract agreement. The collateral is always pre-agreed before the lender commits to the terms of the loan. In case of default on the loan by the borrower then the collateral automatically gets passed to the lender to cover the non payment. Further to this, it will affect the reputation of the borrower in the system much like a credit rating system does within a banking institution.

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