Ethereum DeFi Project Teller Facilitates First Unsecured Mortgage

Blockchain: this is where you can buy Bitcoindigital images of Bored Apes, and—for a brief moment—Teslas.

Also: houses.

USDC.Homes, a company that partners with mortgage lenders and brokers to facilitate crypto home loans, closed its first sale via Challenge Teller loan protocol.

The new owner withdrew $500,000 USDC stable mortgage on an Austin, TX condo worth $680,000.

Teller calls it the “first unsecured DeFi mortgage”; the borrower did not provide a guarantee (although he paid a deposit in USDC) but got the loan because of his credit rating.

Additionally, Teller says all loan transactions took place on-chain via PolygonThe Ethereum sidechain to make transactions faster and cheaper.

Unpacking Crypto Mortgages

The advantage of crypto mortgages is that those who hold a lot of digital assets do not need to liquidate their holdings to buy a house, which would trigger capital gains taxes.

Decentralized financial loans – which allow people to lend and borrow through a computer program without going through a bank or other intermediary – have generally required collateral. This means that in order to get a crypto loan, you must first deposit a certain amount. If the price of the cryptocurrency drops too much, then the protocol can cash out your deposit to avoid a loss.

Teller, on the other hand, specializes in unsecured lending by mixing on-chain lending with off-chain data, such as credit reports.

For Teller Founder and CEO, Ryan Berkun, it combines the best of both worlds: “This innovative mortgage marketplace, based on the Teller Protocol, integrates a consumer-grade user experience with the backbone infrastructure of DeFi digital assets. “

USDC.Homes plans to expand beyond Austin to all of Texas and eventually the rest of the United States