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67 sats \ 1 reply \ @SimpleStacker 4h \ on: How to Borrow Against Your Bitcoin, or: Overcollateralized Loans are Inefficient econ
Thanks for the excellent writeup.
I was wondering about the 3-of-3 multisig. Does that mean you need a trusted third party to adjudicate like an escrow provider?
I was also wondering what happens if one of the parties decides to hold up settlement of the loan by refusing to sign. I'm guessing that's the zombie apocalypse scenario, and the bitcoin will be released to a default address (probably the lender?)
Lastly, with regard to the fragility-efficiency tradeoff; how does the protocol guarantee no rehypothecation? Since the claims against the borrower are all off-chain, couldn't the lender sell these claims or borrow against them?
I was also wondering what happens if one of the parties decides to hold up settlement of the loan by refusing to sign. I'm guessing that's the zombie apocalypse scenario, and the bitcoin will be released to a default address (probably the lender?)
I'm no expert here (just relaying what the Firefish dudes say—trust, not verified), but holding settlement there are verification rounds between lender-investor and Firefish. (I assume if you can adequately prove that you've repaid the loans, the Firefishers can overrule one party.)
As for zombie apocalypse, it's some backup Firefish-disappears scenario. Very iffy if that shit works (hard to try/verify yourself as well)
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