A home-owner in Australia has switched to a fixed-rate “ #DeFi mortgage” and waved goodbye to his traditional bank. Great article about this in @DefiantNews and here’s our TL:DR

1/10 An anonymous engineer working at a top DeFi protocol has paid off his mortgage with the Commonwealth Bank of Australia and has refinanced his home loan through @NotionalFinance instead, which provides fixed-rate DeFi lending.

2/10 The engineer originally tried to refinance using a regular offset loan, which would use his savings account interest to help pay the mortgage.

3/10 However, this proved too tricky in #TradFi, as “banks were very cautious about lending during the time of economic uncertainty.”

So he turned to #crypto and Defi, using his crypto assets as collateral instead of his home.

4/10 This allowed him to keep his crypto exposure in the bull market, while also reducing his paperwork effectively to zero.

To be fair, the process wasn’t seamless or without risks.

5/10 Although DeFi is far ahead already in terms of pure convenience, achieving the end result was still a multi-step process -- it’s all described in the full article.

6/10 Another drawback of the DeFi loan was that @NotionalFinance was only able to fix its rate for six months, rather than the 24-month typical fix from a regular bank.

7/10 On the other hand, the engineer felt it was worth the risk, knowing that if rates went too high on Notional then he could switch to any other lenders and then return to Notional once its rates dropped back down -- again, a level of flexibility that #TradFi cannot match.

8/10 This development marks a major step in a sector often derided for lacking use cases beyond speculation.

9/10 There’s still some way to go, but I’m sure that the rise of fixed-rate lending protocols in decentralized finance will attract more users seeking stability in longer-term investments and loans, such as mortgages

10/10 “I think it’s incredible. We should be able to be our own lenders.”

Be your own bank.

Full article: https://bit.ly/3p21QA4 

So stay tuned for updates