Now that we have DeFi, we can explain TradFi events in its terms and it makes it much clearer and entertaining, ex with the mortgage crisis:
> Banks held tons of discrete mortgage NFTs that had low individual liquidity
>> They make a Vault to regroup them + tokenize it fungible (ERC-20) to boost liquidity
>>> Mortgage-Vaults are massive success and widely adopted
>>>> Everyone takes the vault tokens at face value without checking what you can redeem it for
>>>>> Collateral composition deteriorates until it reaches a tipping point
>>>>>> The veil is lifted, everyone realizes they have been holding shit tier NFTs in a fancy package, kaboom
At least our collectible NFTs vaults were funnier, you had the occasional "let's snipe the rare that was dropped into the vault", and the cool factor of leveraging a jpeg.
No such fun in TardFi, only pain
2.21K
15
The content on this page is provided by third parties. Unless otherwise stated, OKX is not the author of the cited article(s) and does not claim any copyright in the materials. The content is provided for informational purposes only and does not represent the views of OKX. It is not intended to be an endorsement of any kind and should not be considered investment advice or a solicitation to buy or sell digital assets. To the extent generative AI is utilized to provide summaries or other information, such AI generated content may be inaccurate or inconsistent. Please read the linked article for more details and information. OKX is not responsible for content hosted on third party sites. Digital asset holdings, including stablecoins and NFTs, involve a high degree of risk and can fluctuate greatly. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition.