Features and Risks

Risks

1. Higher Risk for Lenders: Without collateral, there’s a bigger chance borrowers won’t repay the loan.

2. Trust Issues: It’s harder to prove someone’s reliability in a decentralized system.

3. Smart Contract Vulnerabilities: Weak spots in the code can be exploited, leading to losses for lenders.

4. Maintaining Trust: Building a trust-based system without collateral can be complex.