- Loan Protocol Aave has rolled out a new service on Ethereum which allows users to take out unsecured loans.
- Users who deposit an asset on Aave can now "delegate" a line of credit to another person.
- The parties involved in the process must sign a legal agreement which defines the terms of the loan.
- LEND / USDT fell below the uptrend line.
The Aave loan protocol has unveiled a new service on Ethereum , which allows users to take out unsecured loans. Aave's founder and CEO, Stani Kulecho, spoke to Twitter about how users who deposit assets on Aave can now "delegate" a line of credit to another person. He explained that if user A file the USDT and delegates its credit line to user B, B can remove the ETH of Aave without guarantee.
Decentralized protocols generally require users to post more collateral than they wish to borrow. For example, MakerDAO requires borrowers to deposit at least $ 150 ETH for every $ 100 in Dai they borrow. Karen and Chad will also sign a legal agreement stipulating the terms of the loan, including interest rates and repayment terms. This would be done using a smart contract system developed by OpenLaw, a company supported by ConsenSys that develops legal agreements based on the blockchain.
OpenLaw co-founder Aaron Wright said having an auto-generated contract “gives it the weight of the real world, not just the world of crypto.” According to Wright, this approach can make the DeFi space more attractive to traditional players.
As we think about these protocols and watch them evolve and manage real money - not the relatively small amounts that flow through Ethereum today, but the larger amounts we see daily with financial institutions - these rights and bonds are becoming more and more important.