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.

PreviousUncollateralized LoansNextSolution by PillarFi

Last updated