Dear @culgin
I only had a chance to read your publication right now. However I upvoted it already earlier on.
I must admit that it's my very first time I'm hearing about Overcollateralization .
placing an asset as collateral on a loan where the value of the asset exceeds the value of the loan
Can "regular human beings" do that? Or is this "service" designed for large players only? I also wonder how popular is Overcollateralization in current days.
if I have a house that is valued at $1m by the market, overcollateralization means that I will use the house as a collateral and loan less than $1m
That sounds like a suicide :)
Cheers
piotr
"Regular human beings" can definitely do it now through DeFi.
Why is it suicide? It is safer for the lender and improves the creditworthiness of the borrower.