Funding developers with p2p collateral based lending/borrowing.

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4 years ago

Development must be funded somehow! We all must agree with that, but we also must agree that introducing a "tax" will open the doors to an attack vector.

Lending/borrowing is a HUGE $$$ business, it will also add another use case for BCH, using it as a collateral for borrowing/lending.

I propose creating a descentralized collateral based lending/borrowing platform and a stable descentralized coin pretty much like DAI.

Lenders can lend their stable coins to borrowers via a smart contract. Lenders will charge an APR% in expect for a profit. In the case of the borrowers, they will need to put BCH as the collateral asset to get 50% the worth of their coins in stable coin.

A fee must be charged either on the lenders or on the borrowers to fund development in bitcoin cash.

In example.

If the lenders decide to lend their money with a 10% APR (via free market). They will be charged a 12.5% fee within that APR.

or

If the borrowers decide to borrow stable coins from lenders at a 10% APR, they will be charge on top of that 12.5% of the whole APR profit.

It is not clear who would need to pay the fee. The borrower or the lender.

The beauty of this model is that nobody is forcing a TAX. Consensus and protocol change are not required either. The lenders or the borrowers will pay the development fee because:

1. They are using a financial service in exchange for a profit OR to get leverage.

2. That's it, do you need more reasons?

Of course, the management of the funds will also have to be managed in a descentralized, transparent and democratic way.

But the integrity of the Bitcoin Cash network will remain intact, which is the most important.

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