Well if you default BitLendingClub is going to find it difficult to find someone willing to buy those domains for the same value as your loan. He has either grossly misjudged the value or doesn't understand what good collateral constitutes. I'm actually very surprised he would be willing to take those at that value.
Please note that my assumption is that the website will fetch no more than 1/3 of the valuation price. This is the first time I take domain names as collateral, but I'm assuming that liquidation will occur at a substantial discount. I'm not sure if 1/3 is overpriced, but if the community feels that it is, then the collateral ratio will be respectively lowered.
Again, I'm not an expert at this, I'm just trying to provide a solution which works for everybody. Your opinion is greatly valued.
Best Regards,
Kiril Gantchev
CEO of BitLendingClub
Domain names are worth about $0.25 (what malware distributors would pay for any random domain) until someone is interested in purchasing it for a given price, and has the capacity to purchase the domain for their offer.
Valuations value how much a domain is worth
if someone is interested in purchasing it, and has the capacity to purchase it.
While it is plausible that the domains will be sold for, say $200 each, they are not easily liquidate. Seriously, nobody will buy them for even $10 in an auction. It is only when someone has an interest in that domain, then it would be possible to liquidate the domain for anywhere near any valuations.
I recommend cancelling the collateral status of the loan, or more appropriately value the domain names. I recommend a valuation price of $20 per domain, and I believe that is stretching it.