Topic: Anybody making a mortgage(defi) market for Bitcoin? (Read 212 times)

Ethereum address: 0x2cEa3497F1c23f570f8a5Fc7CE33C8aEdA043F2d

Token Name: Deflationary Finance
Token Symbol: DeFi
Initial Total Supply: 30,000
Token Characteristics: Deflationary ERC-20 Token
Website: https://deflationary.finance/
https://twitter.com/DeflationaryFin
https://t.me/deflationaryfinance
Token Contract Address:
https://etherscan.io/token/0xa73d6348fbc57913574081868175ba0028f38a47

Token Name: Deflationary Finance
Token Symbol: DeFi
Initial Total Supply: 30,000
Token Characteristics: Deflationary ERC-20 Token
Website: https://deflationary.finance/
https://twitter.com/DeflationaryFin
https://t.me/deflationaryfinance
Token Contract Address:
https://etherscan.io/token/0xa73d6348fbc57913574081868175ba0028f38a47

Yes, it is not easy to achieve such a mortgage market based on the Bitcoin protocol itself. The value of the loan coin must be stable. Considerable coins include omni-based USDT, or a new stable coin minted according to the value of the collateral, similar to MakerDao's DAI.

Key points that must also be considered include:
1. To determine the loan interest rate, the loan interest rate should be a dynamic value that can be adjusted by the market.
2. Assessment of collateral value, which is how current Bitcoin prices are offered.
These features seem must to be centralized. In fact, the defi applications on Ethereum is also centralized in these features.

There are some tools available in the Bitcoin protocol can be used to implement this idea:
1. LockTime: Can be used to set loan maturity;
2. MultiSig: The multi-signature mechanism can be used to confirm the redemption when the loan matures.

I don't think we have such facility available for bitcoin anywhere. MakerDao is the first in the market to offer such facility but it works only with ETH right at this moment. The facility is known as CDP" or "Collateralized Debt Position". However, this facility is only beneficial to the mid-big scale miners providing the fees and the collateral requirement is pretty high! Even though it is indeed a very interesting idea, the ancillary fees has to go down to make it accessible for all! Also the volatility of the borrowed coin should be very minimal to prevent losses to the borrowers. Let me give you a simple example.

You pledged $150 worth of bitcoin and received 0.15 maker coin with a contract to pay back 0.16 Maker Coin at the end of the contract. Now to spend it for your electricity bill, you will have to convert that Maker Coin to cash by paying additional fees. Now if the price of maker coin goes up in the meantime, the borrower will have to spend additional money to fulfill the mortgage requirement as he will have to again buy the required amount of Maker Coin from the market at the market price. It's not an win-win situation for a small scale miner.

So I believe, a crypto to cash mortgage market is better and more accessible to all given a fact that fiat's value is more stable than cryptos. The idea should be, getting cash by pledging crypto and returning the same amount with small fees to unlock the pledged crypto. That's easier and doesn't feel heavy on the pocket.

Bitcoin mortgage is a very wonderful idea but i don't think that the service is being offered anywhere.

This is a unique idea, it is my first time hearing this kind of thing. Bitcoin mortgage would really be helpful to bitcoin miners if there is such a thing as mortgage. But since we dont really have a clear idea as to how it works can you explain it more further and give some clear definition and examples so we can easily grasp how it works. Well as for this time there is no bitcoin mortgage but there are mortgage lenders all over the world.

This year, the defi market in Ethereum has made good progress. MakerDao, dydx and compound developed well.

For Bitcoin miners, they need to sell and pay for electric fee. If there is a mortgage market, they can mortgage bitcoin into cash to pay for electric fee when the price is low, sell it when the price is high, or hold it for a long time, only in a bull market.

It sounds very interesting. Anybody making a mortgage market for Bitcoin?