There are a growing number of credit cards for a crypto account from Gemini, Coinbase, and others. But none use DeFi in a meaningful way and all still have a company (not protocol) in the middle. Similarly, DeFi lending is mostly still leveraged trading vs. use cases like a consumer credit account. What would a solution look like here?
Deposit $20k of ETH into “the Protocol”, a 4626 wrapper around Aave. Protocol issues you a credit card that can be used for merchant payments, which borrows USDC from Aave and sends to merchant’s bank/custodian. Bonus points for bypassing Visa/Mastercard networks eventually.
Protocol strongly incentivizes you to pay off your card every month, otherwise your Aave collateral is at risk. Protocol earns a % of your Aave yield, plus default fees. Protocol has baked in liquidation protection for ETH price risk a la DeFi Saver and super strong fraud & risk management. Perhaps you don’t even get chargeback protection.
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