[dannyw]

Mortgages are overcollateralized loans.

Credit cards are loans based on future income streams (which can be securitised in fact with crypto technology -- think a defi bank automatically getting 20% of your future income until it is repaid)

[lottin]

The problem isn't overcollateralisation itself but the inability to seize the collateral in particular, and assets in general. A mortgage depends crucially on the bank's ability to seize the collateral in the event of default, and the same applies to credit cards. The problem is blockchain assets are unconfiscatable, which means any form of financing involving such assets is unworkable.

[dannyw]

No, blockchain assets can be confiscated. Maker, Aave, confiscate and liquidated billions of assets in the past few days.

Smart contracts are Turing complete and you can build anything with it. You can even build an opt-in judiciary system with the power to reverse transactions.

I think you'll be pleasantly surprised if you look at how DeFi actually works.

[lottin]

No, Maker & Aave haven't confiscated anything in the past few days. Either you don't know what 'confiscate' means or you don't know how Maker & Aave, and DeFi lending in general, work.