I wouldn't see how. AIUI, DeFi loans are over collateralized. It's appears to like taking out a second mortgage on your home. You make payments or the collateral disappears.
The only benefit of this I can see is converting tokens to cash as a hedge against a crypto crash. If you pay off the loan and the token price continues to grow, you get all your tokens back and it only cost you the interest. If the token price crashes, well you already have the cash, so you can default on the loan and the only collateral is worthless tokens.
Re:What I'm Frustrated by in Crypto
by superchroma on Sunday July 31, 2022 @02:56PM
(#32297794)
I can't see how, as all collateral currently is expressed in other cryptocurrency.
Does anyone have an example of someone who was unable to get mortgage from a traditional banks but was able to do so via Crypto? Are there any examples of someone with a great business idea who couldn't get a loan from a bank but was able to get funding via Crypto?