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0 pointskkjjkgjjgg4y ago0 comments

That doesn't seem to make sense. Don't people usually borrow money to spend it (for example to buy a house or finance their startup)? So in most cases the borrowed money is also gone and at most you can confiscate the collateral (for example the house). That is still possible with crypto.

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lottin4y ago· 2 in thread

In decentralised finance the legal system, which in conventional finance has the power to seize the borrower's assets in the event of default, is replaced with "dumb contracts", but dumb contracts don't have such a power. Financing is basically impossible with decentralised finance.

kkjjkgjjggOP4y ago

Just because finance is decentralized doesn't mean the law doesn't still apply. I don't know where you get that idea from. Also not sure what you mean by "dumb contracts" - crypto contracts can contain code on top of text, whereas traditional contracts can only contain text. So obviously the crypto contracts are strictly superior.

lottin4y ago

The counter-party to both the borrower and the lender is a dumb contract. A dumb contract is not a legal person, and therefore it cannot initiate legal action, nor legal action can be initiated against it. Furthermore, there's no legal agreement between the dumb contract and its counter-parties, since, again, a dumb contract doesn't have a legal personality which is required to enter into legally-binding agreements.

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