There is an opportunity to create a massive revenue stream for BTSX by acting as a market maker/escrow for 100% collateralized loans:
- Add a lending tab to the client
- Lenders designate BTSX holdings as available for lending; set interest rate, loan duration, etc. Funds are locked/escrow and go on the market.
- Borrowers bid on loans. The debtor's borrowing power is limited to the amount of collateral they have available, ie. must designate 1 BTSX as collateral for every 1 BTSX borrowed. Could also subtract interest from borrowing power. Collateral is locked/escrowed when the loan is made.
- When the loan is due the client automatically transfers collateral + interest directly from the debtor to lender. No muss, no fuss.
There are many advantages to this:
- Lenders can generate additional revenue from BTSX holdings
- Borrowers can double purchasing power without a credit rating, loan application etc.
- Speculators can leverage BTSX holdings
- A huge amount of revenue would be generated for shareholders
- No default risk, no credit scoring, no chasing down bad debt
There will eventually be a P2P lending DAC that will deal with riskier loans and all the associated headaches, ie. BTCJam.
However, Bitshares X could deal exclusively in risk free loans and do quite well.
Initially things could be kept simple with one interest rate (... 5%?) and limited loan durations (1d, 1w, 1m, 3m, 6m, 1y).
Bitshares X offers the ability to store wealth and trade assets. Why not add the ability to lend and borrow?