Ethereum-powered mortgages will be available in California and New York by the end of this summer according to the fintech startup Fluidity. The latest cryptocurrency news today explores some more about their idea so let’s find out in the text below.
Fluidity executives say that the new service will be done by the end of the summer once all of the licenses are obtained:
“We’ll tokenize the house, which will effectively take the collateral that is the equity of the house. You’re pledging the house and you get an advanced rate back in terms of dollars.”
Fluidity formed at the start of 2019 when the ConsenSys decentralized exchange merged with FINRA- the registered broker and dealer Propellr. The co-founder of Fluidity Sam Tabar stated that although the ConsenSys founder Joe Lubin is still a major shareholder in AirSwap, the new fintech startup will have a whole new distinct set of shareholders. Some of the shareholders include investors such as Brock Pierce, Bill Tai and the CEO of Galaxy Digital Mike Novogratz as reported in the coming altcoin news.
The upcoming ethereum-powered mortgages will use smart contracts and cryptocurrencies for back-end-management. Fluidity executives stated that the startup is only exploring the partnerships with the ethereum-based lending platforms including MakerDAO’s dollar-pegged DAI loans.
Despite the fact that the ethereum-backed stablecoin is still struggling to achieve liquidity and stability on the market, Lippiatt stated that the ethereum-based mortgages that emerged from a prospective partnership as theirs would only involve a ‘’mitigatable’’ risk. This is because neither the property seller nor the borrower will be in direct contact with the cryptocurrency. He pointed out:
“We will deal with the inner workings of the decentralized system. The borrowers pay back in dollars and we will also be managing the risk profile of the underlying securities.”
Briefly explained, the borrowers will have to submit an online credit card check and all of the personal information just like any other time getting a loan. Fluidity processes the information and will create a smart contract with a tokenized version of the mortgage. Lippiatt says that the loans could later be packed together and resold as securities. He pointed out:
“The whole portfolio will be a composition of a bunch of different loans. We’re looking at methodologies by which we can deploy [underwriting] more algorithmically.”
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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