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NewsBTC 2022-02-07 18:17:06

Hashstack Finance Launches Open Protocol On The Testnet To Solve One of DeFi Lending’s Key Issues

The decentralized finance industry needs a severe shakeup where its current borrowing requirements are concerned. Forcing users to put up more collateral than they seek to borrow is not feasible in the long term. Hashstack solves this issue by bringing undercollateralized loans to decentralized finance. Unlocking The Full Potential of DeFi Lending The concept of decentralized lending and borrowing provides a necessary alternative financial approach. Millions of people have little or no access to traditional financial products and services. The underbanked and unbanked population will be the primary beneficiaries of decentralized finance, but only if the requirements are manageable. In the current lending and borrowing landscape, those requirements make little sense. More specifically, users looking to borrow funds need to put up 150% of the borrowed amount – or more – as collateral. That seems strange, as one traditionally puts up a maximum of 50% of what they want to borrow as collateral when dealing with banks. Moreover, the requirement to have more money than you want to borrow does not appeal to unbanked or underbanked individuals. S&P Global put out a study in 2021 depicting how DeFi lending can disrupt traditional systems. However, they also identified certain constraints that have to be addressed. One of the main concerns is the collateral requirements, which hold back the potentially massive growth of l...

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