This year, the defi market in Ethereum has made good progress. MakerDao, dydx and compound developed well.
For Bitcoin miners, they need to sell and pay for electric fee. If there is a mortgage market, they can mortgage bitcoin into cash to pay for electric fee when the price is low, sell it when the price is high, or hold it for a long time, only in a bull market.
It sounds very interesting. Anybody making a mortgage market for Bitcoin?
I don't think we have such facility available for bitcoin anywhere. MakerDao is the first in the market to offer such facility but it works only with ETH right at this moment. The facility is known as CDP" or "Collateralized Debt Position". However, this facility is only beneficial to the mid-big scale miners providing the fees and the collateral requirement is pretty high! Even though it is indeed a very interesting idea, the ancillary fees has to go down to make it accessible for all! Also the volatility of the borrowed coin should be very minimal to prevent losses to the borrowers. Let me give you a simple example.
You pledged $150 worth of bitcoin and received 0.15 maker coin with a contract to pay back 0.16 Maker Coin at the end of the contract. Now to spend it for your electricity bill, you will have to convert that Maker Coin to cash by paying additional fees. Now if the price of maker coin goes up in the meantime, the borrower will have to spend additional money to fulfill the mortgage requirement as he will have to again buy the required amount of Maker Coin from the market at the market price. It's not an win-win situation for a small scale miner.
So I believe, a crypto to cash mortgage market is better and more accessible to all given a fact that fiat's value is more stable than cryptos. The idea should be, getting cash by pledging crypto and returning the same amount with small fees to unlock the pledged crypto. That's easier and doesn't feel heavy on the pocket.
