[puranjay]

Try to get a loan in crypto with 80% collateral and then we can talk

Crypto “loans” are just loans against existing assets and are all collateralized heavily - 150% is the standard.

There is still absolutely no way to get a real loan with crypto so far - one where you actually borrow more than you have.

[rglullis]

There are two separate things here: one is the ability to manage your own assets, the other the ability to enter in a contract.

I am talking about only the first one. The problems with banks is that they are intermediaries between you and your money.

> Try to get a loan in crypto with 80% collateral and then we can talk

First: a mortgage is overcollaterized. A bank will take the whole house from you if you default, not just what is due. They are taking your downpayment and effectively keeping control over the property.

Second: that is not even the point. The point is that a bank will not give you a mortgage even if you are good for it. Why, because they don't have proper systems in place to assess risk?

Yeah, sure, undercollaterized loans require a system that both parties can agree on and that can solved in case of breach of aggreement. IOW, it is not a trustless system. So it would not happen on the blockchain.

But you know what could happen on the blockchain? I could make a loan with someone I know using the current institutions, add that to my funds to get a overcollaterized loan and then I still don't need a bank. To go back to my first comment on this thread, adoption of crypto does not imply an all-or-nothing approach.

I can be a "web3 enthusiast" and still make use of the current institutions when they suit me. It's the increased optionality that interests me.

[FireBeyond]

> First: a mortgage is overcollaterized. A bank will take the whole house from you if you default, not just what is due. They are taking your downpayment and effectively keeping control over the property.

Uh, no. They are required by law to sell the property at a balance between timeliness and recovery of owed monies. And they are required to return to the mortgagee funds in excess of what was owed.

[rglullis]

They decide how to sell, the value that is owed and so on. In effect, until the house is not fully paid, the "owner" is anything but.