A protocol for reducing overcollateralization for sufficient backing of loans, stablecoins, and other cryptofinancial instruments.

Full idea spec at bit.ly/dappraise

tl;dr A way for individuals to post a hybrid of fungible and nonfungible assets as collateral for loans - the individual with no cryptoassets can tokenize a real world asset, and with the help of a friend or proof of existence and ownership of this real world asset (say, a mini fridge), trade with someone who is willing to take on part or all of the risk of evaluating the nonfungible asset, which is less liquid and harder to sell for capital. The individual does not want to see the item repossessed, as they have greater utility value out of holding it, and thus are incentivized to abide by the terms of loan and not act maliciously, to a certain degree mimicking the effect of overcollateralization.

Market participants can create open pricing models to appraise non-fungible tokens for their use in the overcollateralization of loans. In exchange, creators of pricing models can receive a cut of the revenue/interest for facilitating the agreement of terms.

Participants are able to utilize greater tools for collateralization, allowing for larger potential loan sizes and increased access to capital. Utilizing dharma alongside Kyber, the swaps of any currencies between intermediary parties allows for fluid, piecewise trades and loans that help create a path to credit for those with zero ETH.

This is crucial in order to allow non-crypto-holding individuals to utilize a decentralized, permissionless credit network.

The lender and borrow can set their own appraisal of nonfungible assets, or utilize other open pricing models submitted by model creators, much as two individuals betting on a sports game may quote the third-party “Vegas line” - that is, any of the available casinos or betting sites that offer a value, or agree upon their own rules.

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