How would you go about doing this? As an example, if you loaned someone 167 monero to buy a car and expect them to pay you back in 7 years like a bank does you would be requesting 167xmr*6.02% (to counter xmr inflation) for a total of 177.053xmr. 177.053xmr/84 (months in 7 years) would be 2.107xmr a month. At the moment that is fine, but if the usd price of monero rises and the borrower is being paid in usd then they are going to default and you will loose the xmr. The only way I could see to counteract this would be to lower the Monero payments per month, but then that would take even longer to be repaid.

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[–] prancing389@monero.town 2 points 7 months ago (1 children)

I do not believe we have the price stability to be useful in lending applications, but if I were to do it, I'd be sure to take possession of collateral enough to completely repay the balance of 177 Monero. Otherwise, you're just asking to be taken for the fool. Signing over the title to their car might serve as collateral, where you hold a paper title that's he's physically signed over to you, then you just don't register it in your name, so the DMV still thinks the car is his. If he breaks the loan contract, you register the car in your name and have it repossessed legally. Still, I'd only do that if you know he can't move away easily. Interesting application, though, I'd like to hear more real world applications like this.

[–] shortwavesurfer@monero.town 1 points 7 months ago* (last edited 7 months ago)

That's definitely a thought, but I'm wondering if even repossessing the car would be enough to get you the rest of your Monero back when it was sold.

Edit: Effectively, when you borrow money to buy something now, you are shorting the currency you are borrowing, and shorting Monero is a really monumentally stupid idea.

[–] sigmanero_org@monero.town 1 points 7 months ago (1 children)

Some financial alchemy would help. The borrower would need to buy some derivative that pays off if monero goes up, like a call option. Impossible to find today and possibly expensive for low amounts.

[–] shortwavesurfer@monero.town 2 points 7 months ago

I think eventually Haveno could be made capable of doing this.

[–] originallurker@lemmy.wtf 1 points 6 months ago

Loans in XMR/BTC could make synthetic bitcoin for holding somewhere and then withdraw after volatility periods