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Author Topic: Idea for exchange to implement: pawn your altcoins  (Read 559 times)
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December 03, 2013, 01:39:40 PM

If you have balances on a bunch of different coins, how about a function to pawn them so you can get some quick money in a specific currency?

1. You ask to borrow an amount of currency 1 for period X. As collateral, you offer an amount of currency 2, multiplied by a risk factor determined by the exchange (eg how volatile the pair is, how long you want to borrow for) plus a penalty amount.

2. The exchange places a hold on your currency 2 collateral so that it cannot be used while currency 1 is on loan.

3. If you repay the amount of currency 1 (plus loan fee) within the specified period, the hold on currency 2 is removed. If you do not, you lose your currency 2 collateral, but get to keep the currency 1 amount. (If the market changes it may actually be advantageous for the customer to do this)

This could be a standalone service, but I think it would work better on an exchange, where you may only need a (very) short term loan in order to execute some trades. Because accounts are internal the exchange can instantly grant your loan and hold the collateral without needing to wait for blockchain deposits and confirms.

Thoughts? Has this been done already?
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