I have a question or two related to your 'crypto as pristine collateral' argument.
I understand how transparency plays into this concept.
What I don't understand is how a lender is going to take, as collateral, an asset that can be easily lost forever (if the private keys are lost) or stolen (if the private keys are stolen). I would never take something like that as collateral.
It would need to be locked up in a smart contract to ensure its safekeeping (but even those can be subject to hacking or other types of failures). Is that the mechanism you are envisioning?
Or are you merely referring to the HBD savings contract (or a similar bonding contract) hard-coded in Layer 1?
Or is there a broader application of this concept?
I guess I'm still a bit fuzzy on what you mean by pristine collateral, as it relates to crypto, in general.
It could be layer 1 if it was coded at that level. Without that, it goes layer two where the application would have a token created for what is deposited. The payouts pertaining to that HBD in savings would go to the wallet holding the token. So if something is collateralized, the token would have to be placed into some type of escrow account. If the terms of payment were not met, then the token would be forwarded to the lender.
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