Topic: The lending problem (Read 531 times)

1. Because yeah, people are not usually reading anything besides the first post
2. Your opinion goes against the mainstream here, blockchain and cryptos are the solutions for everything


Name ONE! case where DeFi has been successfully applied to a community without forcing them to first buy coins!
One real example of somebody unbanked with no money getting help through DeFi to start a business, and don't give that crap about somebody buying shitcoin#1 with 1 cent, now the shitcoin is worth 100$ so he uses it as collateral.
We're talking about a real-life experience where you invested all your money in a business and you need a loan because one of your partners is late with money, your car has broken down and you need a loan to fix it but you don't have any, you just applied for a job and because of family problems you need to move and you don't have money for rent...real-life examples!


How the hell would an NFT provide alternate banking to somebody...I doubt even God knows!
You're deeply mistaken working (producing something like an NTF) with a service offered by an institution.

I think DeFi lending and borrowing is quite a joke. I saw some DeFi projects offering borrowing through smart contracts but if you borrow of a value of x, you need a 1.5x of what you borrow for collateral. I know that its quite hard to do lending in this space, but this solution of providing 1.5x of what you are borrowing will not solve your problem. In the real world, you borrow money because you have nothing. You need collateral but different assets. I hope anyone could solve this joke.

I have seen a lot of artificial community building. A free distribution of tokens is fine to create liquidity and awareness, but requesting Facebook, twitter or comments simply to make it look like it has a momentum and people are eager to use the product, when that is just not the case and it may most likely end up in and "excess liquidity" also know as "first day dump".

Regardless, a proper lending system overlay on bitcoin would be something really useful but the point remains that it seems that we would need a third party or some short of legal mechanism on top.

I don't think it can kill banks. It is possible that they co-exist but not killed banks. As for lending, I think it is not possible on bitcoin. It was not under bitcoin because it was decentralized and it was volatile.  There are many reasons why people need banks, and lending is one of it. Banks already set rules and have a fixed systems about it. Or the payment was already fixed. While if it is in bitcoin where the price goes up and down it can be confusing and complicated.

But nfts is not defi though:) And nft business is still highly centralized. Look at what opensea did censoring and delisting art they deemed was not original enough and yet allowing many other ripoff copies of cyberpunks to list.

I like nfts too but you know when the ones making millions and being the most headlines and selling at Cristies are famous rich artists anyway who sell art to millionaires, it's basically just fancy tech for existing scene. Not entirely true of course but all these projects popping up are really not helping the masses I believe.

I agree that DeFi, in current form, isn't really anything about "banking the unbanked". That job still falls to something like an LN wallet and a supporting economy. It is the "crypto VCs", their close friends and the shill influencers who are getting most of the action. Yet, the concept has just begun to be applied. It cannot be denied that certain communities, not necessarily poor or unbanked, are finding use cases that directly increase their incomes.

I keep seeing these posts by artists on twitter expressing happiness when their art sells in the form of NFTs. The NFT platform just provides an outlet, they provide the original pieces too. When it comes to DeFi, the current scenario is mostly about making mad gains by betting on the next product which will provide an alternate to banking. They are far from replacing banks that can provide loans based on assessment of businesses and property and are dependent on crypto collateral. Yet, the opportunity to just find the next Compound or Uniswap is open to everyone. Poor Zimbabweans aren't gonna cut it but a fillipino and a vietnamese with an old Axie account can.

I agree that crypto is a big threat if you will ask the banks but I disagree with the fact that many are saying that Bitcoin and crypto will kill those banks.

I don't see any reason why there are some people mentioning this thing where in fact, it isn't the main reason why crypto has been created at first place. It is in the whitepaper yes but it isn't stated there that it will kill banks.

I hate banks but they will stay for a long time and that is the truth and DeFi? There will be some projects that will stay and there will be some that will scam. These lending and borrowing projects like Compound isn't enough I think and there will be people that will still get a loan on banks rather than borrowing on them.

Why do I find like I keep having to repeat myself or that no one is actually reading what stompix or I said about the problem with defi?

1. No, internet connection is not the only thing you need to have. You also need actual crypto to put up as collateral. You all conveniently ignore this even though others and I specifically point it out.
2. How on earth can unbanked people who cannot reach banks suddenly have internet connection and knowledge of defi PLUS crypto to use Pancakeswap in Zimbabwe? Have you even taken a look at defi stats and see where their users come from and who they are? Unbanked Zimbabweans my ass.

Sorry my friend but you defi people are so, SO deluded. I don't mean to offend you but... it's quite ridiculous the things you believe for the sake of believing.

A lot of financial discussions go on here with people who bought into Bitcoin and think they are somehow genuises but lack any other knowledge on the overall subject of money. You're definitely right that, at least Bitcoin by itself, will never have the capacity to support all the required transactions for even a small country - let alone one of the economic powerhouses, but there may be future cryptocurrencies that are able to do so. We must always remember that there are already huge payment networks, that are well established and already handling the required billions of different transactions that take place each day - replacing that in an equally instantaneous, volume supporting and cheaper manner would be essential before even getting on to the topics of lending/borrowing.

Banking is not all about lending and loans, banking also involves around putting your money into some place, and yes sometimes get a loan if you need, and also there are ton of profit making parts of it as well, all of which comes down to the fact that we are in a DeFi world where you can use it just like a bank maybe with a problem at the loan part.

Unbanked people are unbanked, they are not reaching any banks at all, they do not have that chance, either bankrupted or in a town without a bank, many reasons could be causing them to be unbanked but in crypto all you have to do is have internet connection and defi could be banking you and even making you profit while you sleep. They are not the best at it, but what you get as banking in London is not what you get in Zimbabwe, so a guy in Zimbabwe using pancakeswap is much better than what they have there.

A mortgage is a loan, you can't take a mortgage without a loan just as you can't borrow something without a lender.


So your home is basically your family home and you plan on staying there for 20 years at least, till you put aside enough money to buy directly a house, assuming you're at least 18 now, it will mean you're going to move out of your family house by the time you're in the early 40s?
It's your life, your choices but I would rather pay rent or only mortgage than staying half of my life with my parents.


I think those rates are an average on all types of loans, currently checking my bank account they are offering at 1.25% one whole 1% below what that table says. Of course, there will be differences between banks but in most central and western Europe you will get away with paying something of around 30-50% interest on top of the price for a mortgage. Even less if you have some money put aside to finance at least 10-20%.


No, it is not! You can get a car you can get a house with a loan, you can start a business with a loan assuming you're deemed capable of paying your debts. My parents' business has a credit line opened with our bank, we can spend something at around ~200k if I remember on things without other troubles as the value of the loan is guaranteed by the assets the farms have.
If we would have to apply for a defi loan we would need to sell the farm, come with the coin collateral get the loan...for what?
Most businesses would go bankrupt in a defi style economy.

But you missed the entire point of my post, and the post I was responding to. At least business banks and development banks actually do give out money or capital for no collateral (they require a good business plan and an interview to determine you have a good business idea and the skills to make it work). So they are actually doing more for the working class and "unbanked" than Defi.

My problem isn't about the way the world works, needing money to make money. My problem is how Defi blatantly puts itself out as champions of unbanked and what not. Defi isn't novel. It's the same system that exists, just on blockchain. Decentralized? Did you read about Poly and BSC hacks and how the companies are working with exchanges to hold and freeze funds? It's just p2p lending, an upgrade of existing lending schemes.

That is the case for almost everything else in the world. You HAVE to put money to get money. There will always be people who have bigger purses and can become monopolists. In DeFi, with such proliferation of projects, there are just too many scams where people lock up funds and then farm the token to zero. This has always been the bane of crypto. Unregulated, anonymous founders and the ability to drum up a community with low effort marketing on Telegram and Discord.

Just too many third worlders are out there willing to use fake/ farmed twitter and facebook accounts to shill tokens. Its just the bounty mania becoming the DeFi mania. This definitely doesn't mean that the concept of DeFi isn't novel. It is laying the foundations for decentralized lending. How they evolve to actually fulfill the promise of making it easier to have financial access is up to the community to decide.

Its not that there is no path to such a future. Its only that majority is interested in gambles and mad gains, rather than slow, thoughtful building.

Lending is probably the one service of banks that bitcoin has the most trouble emulating, the rest of the services provided by banks are so easily emulated that we do not even think about them.

So how to solve this? I think the solution given by the forum members of trusted escrows is good enough for the time being, I know we are relying on a centralized entity and we need trust but it is a good enough solution until a more advanced solution is tested and trusted enough by the community, however I will point out that the fiat system encourages debt and easy credit while bitcoin and its hard money policies encourage saving for the future, so this will discourage borrowing and lending by a significant margin and only those that really need a loan will apply for one, reducing the problem somewhat even if this is done indirectly.

If at some point BTC can continue to emerge, I think the only way out of banks is to offer BTC-based loan facilities, of course, if they make a loan in BTC and then go up, that would become the most powerful weapon of that banks continue to live in debt, I also believe that due to the trend of BTC banks could demand special conditions that all their payments be in BTC, and in case the BTC goes down they can give payment statuses that are above their value in FIAT, a bank will never lose, at least the loans would make the banks survive in an eventual global recession of the economy. Aspi is the business model that I think banks can offer.

Honestly i wont really be stressing out on something like this or this kind of topic because it would never happen for central banks for it to be replaced by crypto even though im pro-crypto but talking about this possibility is
really lit and couldnt really happen no matter how crypto market will flourish globally. It would never ever able to replace into those services and other key areas on where banking sector is much more efficient and effective
than on considering that crypto would do the job or would  overtaken. So its better not to stress that much in regards to this.

Well bitcoin can not fully replace the bank in that part but the threat to the bank is that bitcoin allows a store of value and allows you to have freedom about your own transactions, which if you are using fiat you don't have ease of access to these features, but in terms of the lending and borrowing you have a point although there are way that crypto in general can work around it but not bitcoin like smart contracts and lending sites.

With such hacks that happened through DeFi, they can't really be the one that's going to be at par with the borrowing system of the banks. I think, there's no need to solve and there's no problem to deal with.

As the crypto lending works alone and individuals can borrow and lend their assets through different platforms and that's just the same as the banks.

I would say the same thing as what others said about the co-existence with the bank.

Think about it this way, if the crypto lenders are protected as much as banks, then why wouldn't that happen? It would easily happen and there would not be a problem at all. Which means that we are living in a world where lending is not the problem it is the trust that is the problem and we do not trust people that we loan to and that means we are having a lot of trouble about it as well. Obviously we are going to end up with some legal stuff in the future that protects people in the crypto world as well which means that lending will become a business and in the long run we should be able to see it as a common thing, it will take a few years but it will work out eventually.

Default rates are higher now as well in most nations, but when first crypto starts it will be huge, and people will think nothing will happen to them but will go bankrupt because of laws, then slowly people will realize and it will become similar to bank default rates.

I think you should think about "renewing" the idea of the loan, in all its aspects, the first thing is to avoid comparisons and work on the results, these results must be compromised with a fair balance for the parties.

Formal loans in significant amounts are generally aimed at those who have money or ability to pay, and generally at very fair rates, on the other hand the vast majority (people on the ground) pay small loans at very high rates and for Usually you can not access formal loans (banks) but the classic usurious lenders.

That previous point is the weakness that must be attacked and strengthened. If an intermediary is needed, what is the problem, I think it is about renewing the intermediary, not just bringing it to the blockchain under the existing schemes.