If someone defaults we can simply Mint More Tokens to make the creditors whole.
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Undercollateralized lending on the blockchain! I don’t see how this could possibly go wrong.https://twitter.com/sudosym/status/1450474205460549639 …
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The difference being?
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I assume this is because most crypto loans overcollateralized, i.e. require > 100% of the loan amount in collateral. That only makes sense if number go up continues indefinitely. Eventually "under" collateralized would be necessary
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Social capital? Call me skeptical. Credit risk management is not easy. They will probably realise a platform that gives out very small loans to a very small subset of people.
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I guess if these are on chain exchanges with margin triggers it's all "fine" but can unravel fast if someone sees a weak point.
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