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.

Reading the posts before yours I was thinking the same thing. Bank Lending Rate differs significantly from country to country. Here are a few of the top rates around the world(it's clickable):




(Sorry, I have no idea why they didn't put Madagascar with its 48% in the list).

I'm sure many of you guys have those figures in the much lower range.


Aren't they basically the same things, mortgages and loans?

I do not take a loan. My father teaches me to work hard and collect the money because not many people can pay the rent every year until it is finished. You are lucky that you can finish the loan so you can say that, but others might not take that risk and try to search for the other way. You can use your income to buy a small flat with credit if you think it is hard to take a loan and repay the money but you did well by doing that.

My father uses that way to buy our house and with 20 years of playing time, he completes the mortgage payment without taking a loan. That is what I did for my home and I do not take a loan too like my father because I am not good to manage the money for the things that I need. I prefer to do it step by step and not taking a risk too big.

Crypto will not replace the banks but it will work together with the banks and give the best solution for people, I guess. DeFi is still far away from becoming like a bank. Besides that, crypto is still on the grey side, which needs more attention and approval from the government.

Exactly. We are on same page here.
So Bitcoin may be able to replace fiat money, it may be able to replace reserve banking, but it will probably not replace the actual banks.
But giving loans in bitcoin is such a niche product, I don't think that banks will be interested soon doing that, even if they may start seeing bitcoin in the same way they see foreign currencies and enter themselves into the exchange business.

I pointed this out in so many defi threads. You cannot believe how many stupid "defi" projects there are out there who actually still tell everybody that they are helping poor people and unbanked people. Defi for everyone, my ass.

When at the heart of defi, you have to put up money to get more money. Borrowing money for collateral, which must be crypto.

Nobody admits to the fact that "defi" is only for rich gamblers. Banks, you can hate them, but with the government help and a salary you can borrow money for nothing up front.

There don't seems to be any possibility that bitcoin could kill the banking system of the countries in near future because they will be used as an alternate system as mode of payment and banks would still be operational.With the launch of CDBC banks are not going to disappear and local and physical branches would still be in working as they control all the fiat supply and monetary policy of the country and people trust them.With bitcoin you can have freedom of funds but you will also need fiat at some time because you can't always spend your coins from investment point of view and banks fill that position.So they will also operate the other secondary and primary functions in the economy.

At the time I bought the flat there was no bitcoin and even if it were a 120k euro loan in pizza day conversion rate would have been 31 million coins, not really possible, right? 

But that aside, that's why no company in the lending sector, even if they entitle themselves as crypto loans don't actually give loans in crypto, they give you $25 000 for which you have to give coins of $50 000 in value and every time that value drops you will be forced to deposit more coins if you don't want your loan liquidated. Probably in a decade, the price will reach an area where it will be impossible for it to double overnight, so the fear of such swings will go away, but even so, it will still be banks that will give out those loans.

It's a competitor, but crypto to grow needs to take from fiat space! And crypto is taking more and more space! In one moment banks and institutions will try to stop that (and I can bet they are doing that already), but I doubt they can do much!

Simply, traditional monetary systems are corrupted and nobody can fix that! Most of the things that happen in this system are secret, we don't even know what happens... So we come to one of the things I like about crypto, and that is transparency, open ledger... that can help all of us, that can make many things less vulnerable on corruption!

True power comes from the people, masses! In the end, the group of people that is bigger and stronger will win... I hope that people will recognize the crypto as something better, and if that happens bank institutions will fail in one moment!

More than pure lending against collateral, it is the function of investing for which banks will continue to remain relevant. An investment banks "creates" capital by funding projects that are judged to be credit-worthy. There is no equivalent function in crypto. It has proven a very crude and scam-filled method of judging the credit worthiness of projects and teams.

Purely lending against collateral can have a path towards crypto-transformation once there are sufficient technology integration to tokenize property.

This by itself cannot pose a threat to banks. Then again, when people talk about bitcoin posing threat to banks, its not really the banking service providers per se, it is generally the central banks, particularly the US federal reserve which has an unlimited capacity to print the world' reserve currency. This gives it power over deciding who fails and who gets to survive in case of crashes like 2008. It also concentrates power and perpetuates the kind of decision making that leads to such crisis.

Bitcoins monetary policy is a threat to powerful central banks. This has gradually been generalized to be seen as "crypto is a threat to banks". Its more like a competitor.

Indeed, this is not as simple as it is said, but I see that in the loan transaction process the most crucial is not a third party in this case it can be called a bank. But a guarantee. There are no loans that pass at the bank except for a strict administrative selection with collateral requirements. Actually, anyone can do this loan transaction without any problems if there is a clear guarantee. In crypto or in banks, it's all the same. Still going on with the guarantee.

Banks just really it grow because of a number of lenders also growing, this has pratically become a big business nowadays and this seems not be going to happen in crypto. Banks will still exist even there is a huge crypto adoption happen and it was because the majority will still make use of their services that could help them to survive.

Could someone can provide us with a big loan in crypto? That is really hard to find and I think no one will be able to take that but banks can do it. This is a big difference and lenders will be preferred to stay using fiat than crypto.

The only I can think about the lending is the loan rate in different countries. Otherwise what's the problem? The bank acts like a middleman and offers guaranteed profit to the depositor and the loan to the borrower.

I don't know much about the DeFi but this is how traditional lending works:
1. Person A has surplus of money and wants to profit by giving it away to other person(s) but at the same time he is afrad that he may not receive the money that he lent.
2. This is where the banks shine. They connect the depositor and borrower to each other. Person A sends money to the bank and the bank send money to the borrower (person B). Person A feels secure and gets guaranteed profit, bank risks and gives loans in high percentage to the borrower.
3. Depositor gets profit and feels happy, borrower gets the loan, banks get the huge profit. Because the bank is a major player in lending and it's almost the only institute people use to lend/borrow money, they feel safe when giving loans cause the possibility of defaulting is very low, otherwise person gets blacklisted and won't be able to take a loan in his life.

Actually they might fiat for it. Just think: would you have (ever) paid that loan back if it were in bitcoin?
Right now inflationary fiat is a great tool for lending, helping you pay back easy and also helping banks because they can work with fractional reserve.

So, in short, crypto will not kill banks and without a bank, you won't see a crypto loan!


Bulllll****! There is no problem is borrowing if you know what you're doing!
I took a loan that I was supposed to pay in 25 years (paid it way earlier) and I bought my small flat, what was I suppose to do without a loan, live with my parents till I was 50 or spend the money I was putting towards paying the loan on rent and end up with nothing?

Crypto alone will never replace banks!
I don't know a single person who has spent 20 years getting slowly money to start his own business larger than a hot-dog stand but I know tens who have done so by taking a loan from a bank! How will this work with defi and collateral? You will have to come up with $100k to take a loan worth $30k? Like it or not, a lot of small businesses were started with loans, a lot of them rely on banks to grant them loans when expanding or when in trouble, if we go the ways of collateral nobody with limited resources will ever have the opportunity to start something.

Banks under different forms have given loans for 4 millennia, they don't need fiat money for it, silver or gold worked perfectly, for a bitcoin loan you need a third party, guess who?

You don't need to doubt the world's need to borrow. The World Bank always controls and looks after each country/international borrower, while maintaining stability in international trade, the world bank will guarantee capital and loans in the form of international investment, for now there are 100 IMFs including world bank branches around the world.

To solve this problem the world bank will make low interest loans, credit and also the world bank will provide grants to countries in the poorest category, in other actions taken by the world bank is to support such as investment, hospitals, education, infrastructure and education etc.

The decentralized lending protocols show how laws don't take place though.

The rules are set by smart contracts, so lenders are protected if the code is done well enough, whereby it triggers full liquidation of borrower's collateral if they don't pay back. But at the same time, if the code isn't good enough or market flash crash or spikes happen, we've also seen borrowers take advantage of flash loans and win big leaving lenders at a loss.

No laws to take them to court because it's all "decentralized".

People are hungry for something they do not have so they borrow money from others to get what they want. We can start living again without lending and borrowing but the banks will not stop people from borrowing from them.

If people realize about living without borrowing and lending is better, they will not try to borrow or lend to others. We can not do anything because people are free to do what they want and know the consequences.

It seems very difficult to expect a world without lending and borrowing, because some companies need loans to be able to expand their business.
Because finding investors nowadays is very difficult compared to finding loans, so I think borrowing is still needed. The problem is don't make
borrowing a habit, if it's not for urgent needs, it's better to avoid borrowing money. Therefore banks will be difficult to replace, so the government
does not have to worry about Bitcoin replacing banks. Due to the fact that banks are still needed, one of which is that banks can lend money to
those in need.

Any big business needs investments, loans, and where can I get them?
Strange people want to sit in their burrow and do nothing worthwhile.

Fiat being inflationary it's a pretty good business to borrow. If there will no longer be lending in fiat and that's replaced with lending in bitcoin, the fixed supply / increasing value coin may convince people to stop borrowing this easy. But that's quite far in the future; I don't expect the current system give up easy.

What if we don't really need lending and borrowing? What if we'd start living again on our very own basis? Why should we borrow from our future when we should focus on how to make a living and actually live in the present time?
Your discussion is just perpetuating the current rotten system, sorry to say.
I'd prefer a world where everyone would do only the things he can do..
The American dream of taking from the future's over and done.

Without third party there will be a valid collateral and there should be some kind of agreement or else most loans will become default and the Market will totally collapse.

Banks do not have any power over you at all unless there are laws, laws that protect their fiat currency when they loan you. So, if you take a loan, and do not pay it, what happens? Bank seizes your stuff and come in with couple cops and take your stuff and sell them to pay off your debt right?

Well, why shouldn't that be the same for crypto? If banks are given the right to loan crypto to people, and if you do not pay your crypto loan back, then there should be laws that will allow banks to come in and seize your things and do the same thing they do with fiat. It is not about lending not being easy in crypto, if you loan to someone you do not know then you will not be able to do anything, however if there are laws and the laws back you up then you can loan to anyone you want and if they fail then you take their stuff, just like how it is in fiat world.

In my opinion, DeFi is just a platform, where they offer financial management services, the products are the same as banks, so their position is still the same as banks.
The banking world will never be replaced just because of cryptocurrencies, and what happens is that they will make peace with crypto and make certain coins that are considered valuable as part of their products, such as savings, loans, or financing products, and loan products become one of the flagships of almost all banks in the world.

Totally agree here, I love Bitcoin, I love torrenting, I love all kinds of P2P and when I can share, trade crypto, even music, I try to do p2p as a more decentralized form of interacting. But this doesn't mean I abandon centralized alternatives.

Bitcoin's great but it can't pay my bills.
I've got torrents waiting for months, and then I probably will give them up at a time.
P2P trading's great until you keep getting orders cancelled because people aren't online. Then you switch to an exchange for instant trade.

I really, really get annoyed with decentralized this and that... which isn't even most of the time the truth.

Really is somehow hard for this to happen in the blockchain platform but I believe that all these problems would be resolved as time goes on. We all know that change is constant and everything that is happening now is tend to be adjusted as more people adopt the use of Bitcoin and it blockchain interface. There is no need to panic about how Bitcoin will overcome the Fiat system of transaction of goods and services whereby making it hard for borrowing and lending to occur without it being compromised.

There is no problem because human society will always operate on trust and server/client relationship. You can't turn everything into a decentralized network and doing so is often counterproductive. Bitcoin works by having every node store all transactions ever made, so its capacity is very limited. Torrenting networks suffer from the problem where rarely-accessed files can't be downloaded until someone who has them decides to seed them. Point is, decentralized is not automatically better.

The idea that everything should be decentralized is just a hype created by crypto bros who sell shitcoins and "blockchain technology".

I absolutely agree with this and I don't think Bitcoin can replace banks in the foreseeable future. Why I'm not saying "ever" is because maybe a completely new economic system will be invented in the future, and in that system maybe Bitcoin will replace banks, but with the current system we can't live without banks, and I personally can't imagine this new system yet.

I think that most of the Bitcoin/cryptocurrency supporters are coming from the assumption that "banks are bad by default",which isn't always the case.Some banks provide better customer service than others.
Nobody said that Bitcoin is going to replace the banking system,in terms of lending and borrowing.
Bitcoin is supposed to replace the banking system is terms of where to store your money and how to be more financially independent.
Buying and HODLing BTC is way more profitable than having a bank deposit.
The second idea is that Bitcoin is better than central banks,because no human or entity is controlling the supply of Bitcoins.I agree with that statement,but that doesn't mean that Bitcoin is ever going to replace central banks.

Sounds like it will always end up with how much "trust" is and the banking industry can provide that with money already in their hands that can be paid slowly to the lender.
Third parties, this is why interest is growing when there is more than that.
But I do believe cryptocurrencies cannot overtake that industry. It's just the combined power that will make it better.
Both have their strengths in different services and if only banks will try to adopt it. Humans will still be in control and cryptocurrencies are just tools that need to be used.

While crypto is a great alternative to banks for quick worldwide money transfer, there are plenty of fields the banks still stand solid.


A centralized institution can very easily lend Bitcoin and ask back the same amount of bitcoin plus interest if that institution already has actives/investment in bitcoin. When Bitcoin will become reserve asset for banks, it wouldn't be that strange to have banks lend bitcoin. It's just money after all. Of course, they'll still prefer fiat since with fiat they can do fractional reserve banking.
An exchange has now reserves for that and could start [now] lending, but probably the paperwork involved makes it less compelling as a business, especially as the trade fees are quite a good income already.

But the question to start with may be different. Would you borrow bitcoin, which has a good chance to rise and make you pay back much more, or you'll just borrow fiat, which is inflationary hence it will be much easier to pay it back? Should we really bother thinking that deep into large scale lending in bitcoin?

No, the problem of lending is not solved in DeFi, unlike it, I have found a way to lend if you carefully get acquainted with my project, you will see that this is possible.
http://prosh.info/smart_eng.html
https://bitcointalksearch.org/topic/would-you-like-to-become-a-co-owner-of-a-world-bank-5264440

OP, I'm also not that familiar with DeFi, but I know how lending works and know what a pain in the ass it is when you're combining crypto and lending.  The way I see it is that you ultimately need a way to either force the borrower to repay the loan or put up sufficient collateral in the event that they don't.  I'm pretty sure DeFi hasn't found a solution to the repayment solution, but if it's come up with a way to deal with collateral (without a 3rd party handling it), then I'd say the problem is solved--but I'm pretty sure that isn't the case.

Think about all the mob movies you've seen where a debtor gets his legs broken when he's late on a gambling loan.  That's how tough it is to get someone who can't or won't pay you back (because mobs work--or used to work--that way), and in those cases the identity of the borrower is known.  With crypto and the inherent anonymity, it makes the problem much more difficult, and I seriously doubt there's going to be a way to lend funds efficiently without having a 3rd party involved and still allowing people to maintain their anonymity.

I'd also be interested to know if any of these problems have been solved by DeFi or any other system.

That's what OP mean isn't?
All of the lending platform exist until now is they holding the collateral itself (e.g. Blockfi) or even those self pro claimed decentralized finance is also centralized, you can see how their lending work that need a third party of DEFI platform [1] don't forget too about DEFI Hacks history [2]

The truly decentralized lending is possible to create with peer to peer mechanism, the borrower send the collateral to lender and the lender send the money to borrower. But, it will face some problem of collateral scam (a scammer which selling the collateral to earn profit), which party is sending first, lack of liquidity, etc. There's also a problem if the borrower want to get quick loan, he need to provide specific collateral (e.g. Bitcoin or top 3 altcoins) if he only have precious metal he need to wait few days until his collateral delivered. Escrow will only solve the collateral scammer, but the liquidity and shipping times still a problem which almost impossible to become worldwide lending.

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[1] https://medium.com/@blockchain_simplified/defi-based-crypto-loans-explained-85e40cd485c9
[2] https://bitcointalksearch.org/topic/defi-hacks-history-5267124

And what are the limits of collateral in cryptocurrency, how do they differ from Fiat?

DeFi Lending pools do exist and privately run p2p lenders also exist. Of course we have our own Lending section in this forum to use as prototype example of how lending can be done in the context of cryptocurrency.

However, the fact still remains for collateral and trust. These things are lacking in crypto. Collateral specially valid ones are limited in crypto while in fiat markets, a lot more options are there.

Trust is highly lacking in this sector too added to it the anonymity or pseudoanonimity provided by crypto makes lenders even more careful about lending out their precious coins.

My take on this is that banks cannot replace crypto and neither can crypto replace banks - they are meant to work together and that is what most institutional banks are trying to do with their own take on blockchain development.

Absolutely, it is true, any loan must have a collateral and this excludes a third party and banks will inevitably come to a cryptocurrency in which all transactions are transparent.

I see no problem if there is always collateral in every borrowed funds? but the problem is the assessment of value f each collateral and also the decentralization and anonymity .

because banks will never let go of this meaning we will live forever in banking system if this problem cannot be resolved properly, unless we will use centralized exchange in which also not loved by many here.

I don't think it's possible? The most plausible reason I actually agree with crypto replacing banks is because of its decentralized and transparent nature, which forces everyone to actually be their own bank, which I disagree btw, it'd be coexistent at most, since if people are looking for a decentralized option, there would also be people who would look for a more convenient method, of which centralized is probably the better option than decentralized. I don't think it'd be possible for a lending system to be fully decentralized, unless there's a breakthrough in the way the lending system works.

Addressing the question regarding: Lending
The reason we do need third parties are because of the lack of *trust*, which is honestly right, you cannot just expect people to give the money back if they are not monitored and that is the whole point of the administration.
We can for sure come up with something where there can be organized documents being generated by both parties and where they would have to submit their real passport or something. That can only be accessible to two of them and if they do choose to not give money then it should be acceptable by the government as well.

You are right, DeFi is a dead-end direction that copies the existing monetary system. But you are wrong when you say: "Lending will never be completely decentralized," it will be very soon and without a third party.

Lending, this is never going to be completely decentralized and bitcoin is not actually created to kill the central banks nor to bring the decentralized lending system it is just to eliminate the third party to send your own money to someone so concept of lending is not actually under the bitcoin.

But due to the evolution lot of projects are coming up with different ideas and one of them is DeFi which created hyped but didn't made any changes in the real world usage.

You are right to doubt that the crypto currency will not kill banks. Banks will work with cryptocurrency and lend against its collateral when it becomes profitable and safe. In the next branch, I'm just leading this topic.

https://bitcointalksearch.org/topic/why-dont-banks-work-with-cryptocurrency-5344645

A decentralised system might be a more indiscriminate one.

If we assume the past of what happened, people owned land/property and it was let to them or sold via a mortgage. A lender might know you, ask someone who does to provide a reference or rely on you having a good character (eg having a job and being fairly smartly/cleanly dressed) before lending to you. This is still what happens in a lot of jobs these days where someone on a team assesses applicants to see how well they get on with them.

Currently a lot of systems just use computers to work out whether they can lend to someone and it causes a lot of imbalance - I think this happened to an extent that countries have started passing laws against algorithms making the final decisions on you though. I don't think going back to how things were is necessarily a good idea but it may emerge as a competitor of the current system. I highly doubt you can expect a fully digital contract to be allowed for the value of something like a house, but a witnessed physical contract (referenced and stored online) might still be effective.

I'm not the best guy when it comes to knowledge about lending and stuff, but I am quite sure that the "BTC is a threat to central banks" argument has been mostly based so far on the fact that Bitcoin lets you work with finance without discriminating you and that it provides a store of value no fiat in the world ever has.

Bitcoin will probably never fully replace banks, but it did, does and will affect them severely as time goes on unless banks move faster with their CBDCs. And considering we've first had just a tech geek's currency that now turned into one of the biggest store of value in history, a proper blockchain-based lending system might not be that far-fetched after all.

A simple question to the forum - I hope that people can provide sensible answers, since it would be way too easy to preach rather than to reason.

It has been mentioned many times in the forum that banks can be killed by bitcoin and that crypto is a threat for central banks, etc... One of the reasons that make me doubt about that possibility is the worldwide need of having a strong lending and borrowing system. I think that currently DeFi does not offer a realistic solution and that lending eventually has to rely on an intermediary. That, in some way or under a different name, is a bank.

How is this problem addressed currently and how could it be solved at large scale without a "bank" of shorts?