the backing collateral is effectively 100% of the borrowed asset value
Are you going to update the rate over time? If not, you're effectively buying BTS at 0.01 USDT/BTS.
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the backing collateral is effectively 100% of the borrowed asset value
Are you going to update the rate over time? If not, you're effectively buying BTS at 0.01 USDT/BTS.
Yeah, I'll need to update the rate over time, however at the moment they're set static to expire by 31st October. If I was to run them year around I'd need to run price feed scripts to periodically update their 100% backing collateral rate.
True if I lent at the wrong rate I'd effectively just be buying the BTS, however the other party in the deal would have to fail to repay and surrender their collateral, this in traditional finance would have credit score consequences, perhaps in the future people will track who fails to pay back loans over time
Interestingly, an user accepted a credit offer then 12hrs later let the deal expire, thus I have the collateral and they have the token.
A key take away is that if the borrowed amount and the collateral 100% equal, to repay the debt offer before the time limit would incur a fee of 0.2-1 BTS for no benefit, other than their theoretical DEX credit score impact.
By letting it expire there are no fees for the same effect, so it's likely that I'd need to continuously top up my USDT balance within each credit offer as they'll likely let it expire without repayment.
By the end of the month, 4 credit deals were accepted by 2 users, they both chose to let the repayment expire.
I wonder if this was fully intentional, if they were aware of the short duration and just mistimed their next step in the full credit offer UX, however considering debt and collateral were near equal at the time it maked fiscal sense to not pay an unnecessary fee for the same outcome (minus theoretical credit score risk)