A protocol for unsecured crypto loans

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Lending platforms help projects grow, making them an essential part of DeFi infrastructure. However, he faces a limitation in depositing security with the lender. Eliminating this factor could potentially help projects grow without worrying about using secured loans.

Atlantis managed this pointer by allowing its borrowings to access unsecured loans. They carry a high credit risk; therefore, borrowers must first go through a credit assessment process. Once the process is complete, the lending platform will open a pool of borrowers while automatically matching them to the lender.

Lenders will retain the right to choose their borrowers and set a specific term for the unsecured loan. They also have the advantage of retaining control over the development of a risk profile.

Recurring crypto loans are activated after borrowers and lenders have been matched and the liquidity pool has been set up. Different pools will have a single asset, which will be determined by the needs of the borrowers. However, no pool is shared with other borrowers to prevent it from becoming diluted.

Atledis plans to integrate non-fungible tokens into its lending process. An NFT will be offered to the lender for the loan they granted. This NFT will represent their position and the underlying assets.

Providing liquidity will not be in vain as the lender will earn interest in three situations:-

  • The first primary source will be a trusted third-party protocol
  • Decide on the lending rate and actively make liquidity available to borrowers
  • Borrower pays rewards on capital that has not been actively lent

It is recommended that lenders pay their dues on time, as any late payment may add a penalty to their payments. Principal and interest will be payable when the loan matures, with a penalty to discourage late payment.

A scenario may exist where the loan rate is not acceptable to the borrowers. Unsecured loans can suffer from this factor. To deal with such an obstacle, borrowers have the option of setting the upper and lower limits of the loan rates.

Governance, for the time being, is not decentralized. Atledis plans to offer a native token to decentralize governance. The community will be able to create proposals and vote on them.

There is a discussion about the success of unsecured loans as they carry high credit risk. Secured loans may continue to prevail in the market until they do not restrict the growth of a community. Unsecured loans have their advantages and limitations. Yet, the fact is denied that they will play a significant role in advancing DeFi infrastructure, especially for future generations.

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