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Showing results for tags 'defi'.
A recent report by the European Union Commission, published last month, analyses the implications and avenues with which DeFi could be regulated. According to Patrick Hansen, Head of Strategy at Unstoppable Finance and widely followed for his analysis of European crypto regulation, the report shows that the officials have a good grasp on DeFi and how it works, including individual protocols. The report recognising the blunder of applying traditional financial laws to DeFi stated, “Adapting the EU financial services regulatory framework to a decentralised environment will require a rethink; and regulatory cooperation with the main jurisdictions relevant to the DeFi ecosystem might prove indispensable. To benefit from the inherent data transparency on public blockchains, the Commission announced that it would launch a pilot project on embedded supervision in 2022.” https://www.coinbureau.com/news/european-commission-looks-at-defi-regulation-in-latest-report/
DeFi project Teller has officially made the "first unsecured DeFi mortgage;" possible via USDC.homes, a company that partners with mortgage lenders and brokers to facilitate crypto home loans. The new owner purchased an apartment valued at $680,000 in Austin, Texas, using a $500,000 USDC stablecoin mortgage issued by Teller via the Polygon network. The platform allows cryptocurrency holders to obtain regular uncollateralised mortgages based on their credit scores. According to Ryan Berkun, Founder and CEO of Teller, it blends the best of both worlds, "This innovative mortgage loan market, built on the Teller protocol, integrates a mainstream user experience with the digital asset backend infrastructure of DeFi." https://decrypt.co/98655/ethereum-defi-project-teller-facilitates-first-uncollateralized-mortgage-loan
The term poker staking, or simply staking, refers to the act of putting cash up on behalf of a poker player in the hopes that he or she wins. staking is lending ---------------------- What are the people offering you interest payments doing? They are probably doing something risker to get a return so they can get profit and then give you interest (or you think the interest comes out of nowhere?) Don't be stupid with money. You'll just be making some "smart" person rich: You lend to X. X turns around and lends to Mr. Shorter, for a higher rate. X makes money from your Bitcoins. You take all the risks. X has plenty of his own bitcoins, but, like me, he knows better than to lend them to Mr. Shorter. Meanwhile: ‘Billions’ lost through hacks of crypto lending platforms New research by blockchain analytics firm Elliptic showed that fraud and theft at decentralized finance platforms have led to $10.5 billion in losses so far this year. . . . However, the explosive DeFi growth came along with booming crime in the mostly unregulated sector, Elliptic said. Users have suffered over $12 billion in losses through crime at DeFi apps, lending platforms and exchanges since 2020, with the majority of losses coming in 2021 alone. Those losses were mainly attributed to bug and code flaws, as well as a hacking technique that involves exploiting loopholes in how the DeFi service operates. --------------------------- So the returns on Bitcoin are assymetric. That means that while you can only lose your initial investment, the upside potential on it could be 100x for instance. When you loan out your Bitcoin you actually flip that assymetry against you because of counterparty risk. Essentially, for an added 4 to 6% you’re taking on the risk that the borrower could default (or in most cases with crypto lending - the platform itself could go under). When you assume those risks you’re taking on the chance that you could lose all of your Bitcoin for a 4 - 6% added return when you could have had 170% (the average return so far - likely to be a little lower going forward as the market grows) annually by just holding it.