How can you loan money without trust? Background checks, credit history. I understand if someone uploads collateral like Bitcoin or Ethereum, But then why not just spend the bitcoin or Ethereum? Why take out a loan?
Is it simply to avoid paying capital gains?
Can someone please explain to me how DEFI could ever lend someone money for a mortgage?
They are not paying you a single dime without any collateral. They only pay you 70% or 80% of your collateral. Any any case they are always in a win win situation as none of your collateral will be released until you pay the capital amount.
I have not heard any DEFI lending for a mortgage because their business is based on digital collateral not physical.