Ultimate Guide to Undercollateralized Lending in DeFi
CeFi lenders are failing, DeFi lending has a promising future
Dear Bankless Nation,
Undercollateralized lending is risky business.
In TradFi, these loans typically come from the federal funds market. The Fed can’t default, so they become “secured”. If issued by commercial banks, they rely on rating agencies like Moodys or S&P to determine borrower creditworthiness.
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Ben Giove
Former Senior Analyst at Bankless.
