The collateral must be worth more than the loan + interests (
BTC2.2 in this case) and it should be possible to
easily sell it if required.
Basing your domains' value on "comparable sales" is a great mistake of yours (or a blatant scam attempt) because:
- Only big sales appear on news or are public. Domain prices are subjective and change a lot. If 5 similar domains were sold for $100 each and one for $5,000 then the average is $916 but most probably only the $5,000 one will be public. Any similar domain isn't worth $5,000.
- Almost certainly it caused a lot of work selling that domain for $5,000. It wasn't sold
easily. So in this example you shouldn't even value your domain at the average of $916 but at the easily-selling price of $100
This is why it's very delicate to accept domains as collateral. It's valid collateral only if valued very low. Not nearly as much as "comparable sales" who received great prices.
(I'm aware it's far better to sell the domains than to offer them as collateral. And that's the idea.
You're supposed to want them back)
3. Besides bank transfer - I am open to any other "risk free" method that can ensure the transfer of fiat funds. Then again if bank transfer is deemed as a "risk" I'm not sure what would constitute otherwise.
If you transfer fiat then it is a sale. It can be considered as a loan (with the collateral you offer) plus a sale (for the fiat you send), totaling
BTC2.
That's not how things work here. If you try to fake a sale as a loan then you'll get negative trust.
5. Domains can't be taken back as the owner provides EPP codes for transfer and authorizes the same - the process is irreversible and no registrar or even ICANN can intervene once the transfer is complete as the owner authorized transfer in the first place.
Unless in the future it's proven the domain was stolen in the first place, either by you or the person who transferred the domains to you. In that case ICANN can intervene and transfer the domain to the rightful owner.
Please post here the domain names or PM them to me. If they can really be
easily and
near to immediately sold for more than the asked loan plus interests, then I can fill your request.
Otherwise, if the collateral is invalid, you will get
negative trust.
You also have the option to close and lock this thread immediately.
Edit:
I forgot about this:
2. I am not sure if I fully agree though with the 120% collateral principle as it ought to be equal value (100% of X = 100% of Y). As much as one can argue that it dissuades the applicant from defaulting, the converse also applies: what happens in the case where the person who facilitates the loan, refuses to return the collateral, perhaps because its value has appreciated or for some other reason?
No, the converse does
not apply. If you don't trust the lender then the collateral must be held by a trusted escrow.
It must not be possible for any party to scam. That is achieved by providing collateral clearly worth more than the loan plus interests.
This is
not a sale where both parties give something worth the same, especially if one part gives something (domains) whose value is subjective.
This is a loan and you must be willing to get the collateral back.