Maybe stupid question, but how does real world lending help? LIke,

Question

Frax Finance

Ernestas | GT | Won't DM first

Maybe stupid question, but how does real world lending help? LIke,

the frax that is lend out would immediately be sold off to fiat, which is like the only operation that hurts the peg.

#cryptocurrency #english #frax

0

24.05.2022

11 ответов

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K P will block you if DMed

Sam Kazemian ¤⛓️¤
You are right that you can't lend infinite amount ...

Sam what size loans are you imagining?

0

24.05.2022

S

Sam Kazemian ¤⛓️¤
You are right that you can't lend infinite amount ...

This is gonna be a silly q perhaps since I haven't read the whole chat leading up to it, but what kind of interest rates are we looking at, and how much collateral would a borrower put up?

0

24.05.2022

Sam Kazemian ¤⛓️¤

K P will block you if DMed
Sam what size loans are you imagining?

The two governance proposals that have passed for Goldfinch and TrueFi are around $100m in size, but they will not be deployed all at once and are incremental works in progress.

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24.05.2022

Sam Kazemian ¤⛓️¤

S
This is gonna be a silly q perhaps since I haven't...

All are different per lender and market conditions. The loans will be done through TrueFi.io and Goldfinch.finance so the terms will likely be similar to things already on their platform.

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24.05.2022

H¤reτ¤r¤

Sam Kazemian ¤⛓️¤
All are different per lender and market conditions...

Have you also looked at rwamarket.io ? Its a collaboration from centrifuge and aave. Basically works like aave, you can withdraw at any time. Seems great for an amo since we're already on aave.

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24.05.2022

Luke SkywalkeI2

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Have you also looked at rwamarket.io ? Its a colla...

What is this exactly? Excuse my ignorance

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24.05.2022

H¤reτ¤r¤

Luke SkywalkeI2
What is this exactly? Excuse my ignorance

Real world lending.

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24.05.2022

Luke SkywalkeI2

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Real world lending.

I see. Thank you

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24.05.2022

H¤reτ¤r¤

H¤reτ¤r¤
Have you also looked at rwamarket.io ? Its a colla...

@samkazemian have you looked at this? Might be very interesting. Invoice financing and other RWL for very credit worthy companies. On aave and currently also subsedized by some nice centrifuge yields.

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24.05.2022

Sam Kazemian ¤⛓️¤

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@samkazemian have you looked at this? Might be ver...

Haven't yet but will take a look thanks 👀

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24.05.2022

Sam Kazemian ¤⛓️¤ · Accepted Answer

You are right that you can't lend infinite amount of FRAX as that is obviously bad for the peg since it is a lot of people taking short positions on FRAX. However, the real world borrower is typically an actual productive company or enterprise that produces consumer goods and things of value like cars, food, electronics, energy etc. They pay interest to FRAX for borrowing so they can invest in their growth. This is in stark contrast from overcollateralized onchain loans whose entire purpose is for leverage trading and yield farming. When demand for leverage goes down in a bear market, so does most revenue from overcollateralized loans. However, real world lending creates demand for FRAX stablecoins (since they will have to buy back the FRAX and repay the loan on maturity) completely independent of demand for leverage/farming. It connects a stablecoin's revenues to productive economic activity which is the only real way to scale to 10s of billions of market cap.

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Maybe stupid question, but how does real world lending help? LIke,

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