Defi Lending/Borrowing Fungibility? | Bitcointalksearch.org

PrimeNumber7

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Quote from: buwaytress on May 27, 2021, 08:59:39 AM

Also I think important to note that unlike Bitcoin, which uses a utxo model, all of these defi protocols you mention (still feels papery to even mention that phrase in my head) are all built on Ethereum, which uses an account based accounting model.

To sum it up, unlike Bitcoin, when you send aave or whatever, you're just telling the network to update account balances. Plus to account A, minus to account B. There are no coins and tokens to "mix and mingle".

I might be wrong but that's how I thought it works with Ethereum... Not super familiar.

It should not matter if a coin used a UTXO or an account-based accounting method when tracing how coin is spent. An account-based accounting method means there are no change addresses. You can still trace coin sent from address A to address B to address C.

buwaytress

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Also I think important to note that unlike Bitcoin, which uses a utxo model, all of these defi protocols you mention (still feels papery to even mention that phrase in my head) are all built on Ethereum, which uses an account based accounting model.

To sum it up, unlike Bitcoin, when you send aave or whatever, you're just telling the network to update account balances. Plus to account A, minus to account B. There are no coins and tokens to "mix and mingle".

I might be wrong but that's how I thought it works with Ethereum... Not super familiar.

Renampun

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Quote from: TryNinja on May 21, 2021, 06:44:33 PM

No and no.

You take out 10 USDC, it's 10 USDC. It's not "10 USDC from address XYZ"... This simply doesn't exist, specially because you are taking them from a central smart contract (Aave's pool).

true, this is the result of the agreement with the platform not from someone else's wallet...

I know there are a lot of people who are religious who are afraid to invest in defi for fear of getting dirty money, I think we have to be open-minded because of the results we can get from the platform even though there are millions of people involved with various backgrounds.

PrimeNumber7

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Quote from: ulhaq on May 21, 2021, 05:56:04 PM

Eg if someone has dirty coins and they get them into these platforms, am I at risk for getting some of them when I withdraw the coins I put in to try to get interest?

When you withdraw from this types of service, it will be clear that you are withdrawing from said service. It would be as if you were withdrawing from an exchange.

joniboini

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Almost all decentralized lending protocol uses a lending pool/smart contract, even if you're using something like yield.credit where the lending happens directly from one user to another. The "borrow X from address A" might only happen if you lend from a P2P forum or marketplace. I doubt there's any defi service like that since it basically means there's no control over borrowers.

TheUltraElite

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So anyway, I applied as a merit source :)

Quote from: ulhaq on May 21, 2021, 05:56:04 PM

Eg if someone has dirty coins and they get them into these platforms, am I at risk for getting some of them when I withdraw the coins I put in to try to get interest?

No, they are from a pool, much like a mixer service. However I should warn you that if your purpose is in money laundering then you will be caught one day. People have tried using many methods to move tainted source coins/stolen coins through exchanges, mixers, casinos, multiple wallets. But they have been caught. Now I can see that these "Lending pools" will end up with some cases like these.

Very soon they would also be forced to start AML/KYC to prevent such criminals from abusing their system.

Quote

Same thing if I use one of them to take a loan, and then try to deposit it in a centralized exchange, is there a risk it could be blocked?

No. Because it was not your fault. Another point to add to my previous statement - the lending pool needs to protect itself from law enforcement. They would start confiscating coins from such users if they find the increase in such abuse in future.

TryNinja

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No and no.

You take out 10 USDC, it's 10 USDC. It's not "10 USDC from address XYZ"... This simply doesn't exist, specially because you are taking them from a central smart contract (Aave's pool).

ulhaq

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For the Defi protocols like AAVE, I think Compound is another, if you lend your crypto for interest, are you going to get back the same crypto when you withdraw it, or otherwise will fungibility be an issue?

Eg if someone has dirty coins and they get them into these platforms, am I at risk for getting some of them when I withdraw the coins I put in to try to get interest?

Same thing if I use one of them to take a loan, and then try to deposit it in a centralized exchange, is there a risk it could be blocked?

Topic: Defi Lending/Borrowing Fungibility? (Read 144 times)