Topic: [INTEREST CHECK] Collectibles backed short-medium term liquidity (Read 280 times)

Given the increase in BTC value, just bumping this up for those who may be tempted to sell but not quite yet ready to let their items go.

It is possible to have presigned transactions with block height or block time based timelocks, but it may be more effort than its worth for less technical users. Such approaches often end up significantly overpaying fees, since it can be hard to predict a good feerate 2 weeks out, and underpaying might mean you end up defaulting simply because the tx doesn't confirm.

My solution to this problem was to add an option to export the payment schedule to a calendar file that can be imported into whatever calendar software one uses. Probably works just as well.

Payments are only due every 14 days, so if you start on 9th September 2024 for a 28 day loan with a 0.1 BTC principal (although you can only borrow 90%, so on a 0.1 BTC Cas you'd get 0.09 BTC), you would make your first payment on the 14th day (22nd September) of the cumulative interest of the first 14 days (0.0007BTC). Then, on the 28th day, you would repay the principal + cumulative interest for the second 14 days (0.1007BTC)

Having the payments spread apart by two weeks was an intentional choice to avoid prohibitive tx fees, and just make the logistics easier - it is onerous on the borrower to have to make a payment every day, and easy enough for life to make you miss a day and end up in default. Two week periods are much more manageable, and a cadence that many folks are already used to.

This is great. Now, I wonder if there is the ability to write a script for electrum that is able to sign transactions and amounts on specific dates in-so-order to automate loan repayment.

I am aware that there are some forum users who are using scripts to automate transactions for their signature campaigns. Having scripts that sign transactions on the agreed upon dates could automate and remove much of the manual process of signing transactions are repayments.  

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Also, lets say that I borrow 0.1BTC off the back of a 0.1BTC funded cas. What is the payment schedule? If I am making payments each day there will be transaction fees which eat into the loan amount and produce no value for the lender or borrower. What does the payment schedule look like.

The basic calculator is up! You can find it at https://collectible.money/loans

It's pretty straightforward - the main goal is to let a potential borrower quickly run the numbers and make sure things make sense for them.

For instance, 1 BTC for 28 days costs just 0.00767116BTC (approx 412 USD at current prices).

0.1 BTC is even more attainable, at just 0.0014BTC (approx 75 USD). This does put you below the minimum interest threshold by rate, so you pay a flat 5000 sats a day.

The page lists out the payment schedule as well, so you are aware of the expectations. It's a no obligation check, I'm not forcing loans onto anyone.

I'm hopeful this grows over time to be a valuable service for the community here. There's a lot of cool stuff you can do with liquidity in this form, from hedging to covering short term crunches, to leveraging. As always, being responsible is a good idea. That said, liquidity begets liquidity, and good use of this kind of service may be great for the space here.

I was thinking of this concept last night, I am pretty sure this is the first time this service with a collectable flavor has ever been offered? Either way, I do feel that this concept represents a certain degree of sophistication coming into the marketplace.

I look forward to seeing the final page, I feel that this could be a very promising product.

I agree - I did post it here originally, but it was moved over to Lending.

I'm planning to put in some time over the weekend to make it easier to reason about for borrowers with a calculator and cost tool, among other things.

If the actual thread was here, it would be more visible.

The thread should be board native service, and not multi board.  

The thread can be optimized to make it aesthetic and easy to understand for people. 

The Interest Check is still in Collectibles (this thread), but the actual service thread (https://bitcointalksearch.org/topic/servicepilot-bitcoin-collectibles-backed-btc-loans-5507979) is in Lending.

I'd welcome having it back here if the mods agree, but unfortunately for now it is in Lending. I can see why it could be considered as belonging there, but I would say an argument can be made for having it here given the specific focus on only supporting collectibles as collateral.

This thread should be moved back to collectables, as it has lost momentum here.

i would pilot this. thanks.

I have discussed the operational aspect with minerjones, and he has agreed to provide escrow services for such loans.

I will make a new thread in the next couple of days for a pilot run of this service. As per my discussion with MJ, we will run it for the remainder of this year first, and reevaluate the terms and requirements in January based on how the pilot goes.

I love this idea as it could provide a much higher pool of liquidity than is currently available

I vote to use MJ as the universal escrow, so long as he is alright with the idea.

If the consiger does not meet interest payments MJ should be able to auction the piece rather simply like he already does with his regular auctions.

This is the best idea on the forum in months BTW.  

Being able to take collateralized loans out against reputation operated though forum accounts. This is modern day crypto-banking at it's finest, there is nothing like this on the market today.

Cool idea! If there any interest, I’d love to help.

I'm wondering if there's any demand here for collateralized short to medium term liquidity against collectibles.

It seems to be harder to move larger pieces these days at good premiums, but with the volatility some folks may need/want some of their collectibles to be liquid.

If there is demand, I could consider offering short to medium term loans collateralized against collectibles (let's say short <4 weeks, medium <12 weeks).

What I roughly have in mind is to play within a framework of:

1. Loans are issued up to 90% LTV of a loaded item - so a 1 BTC coin is eligible for 0.9 BTC in loans
2. Interest is set to a small but fair value - let's say 5-10% per annum
3. Interest payments are made biweekly to keep the loan in good standing
4. The item is held with a reputable escrow - obviously, it can't be held with myself or the borrower for practical reasons
5. Loans are only offered to reputable, active members
6. The 10% LTV gap is to allow for some buffer in interest payments
7. If a loan is liquidated, I will try to sell the item - failing that, it will be peeled. Any excess value remaining or earned from premiums, less a liquidation fee, would be returned to the borrower.

If there's any demand for this, or someone just wants to try it out, I'd be happy to give it a shot with a pool of maybe 0.25BTC first, and see how things go from there.