Grab some popcorn because this one is lengthy read.
First of all, I just have to mention that this is just a brainstorm, but something I think would bring more value to Anchor and be somewhat revolutionary to the defi ecosystem in general. (And I’m not a developer, I have no idea how this would be implemented)
What if we could borrow without collateral? Similar to TradFi, I think there is a way to streamline this process.
Two options come to mind for me, one more risky, and the other one more complicated to implement:
A. The risky one: Have a sort of “credit score” attached to your wallet.
Similar to ARCx.money, you would earn good score or “karma” by example: Voting on proposals, returning glitched/exploited funds, donating (angel protocol), hodling/staking for long periods, and by the age of your wallet.
Better “karma” or “score” would grant you bigger loan rights, based on your wallet’s net worth. Similar to providing collateral, but without providing collateral, you would have a maximum loan based on all your assets held.
Now if someone where to mess with the system by filling the account and then depleting it, not only would this account be banned from ever taking loans again, but the receiver of those uncollateralized UST and other assets meant to support the loan amount too.
Now I get this is getting complicated and there are flaws, such as someone sending the “stolen” UST to random addresses to get them banned. But like I said, this is a brainstorm to start a discussion
*The interest would be paid with the loan amount just like regular Anchor borrowing
B. The complicated one: UST voting rights, paid by a small margin.
In this one, you would have to deposit a small margin of UST to pay for the loan interest, during the loan period. But this loan would be very restricted to prevent theft, and misuse.
There would be either an interface within Anchor, or support directly through approved protocols (or both) to insure the good and only use of those special UST, let’s say “bUST”.
You could only use those bUST in no-loss scenarios i.e.: Farming stablecoin pools (Astroport…), automated bidding on discounted collateral that is immediately sold (Orca), and arbitrage opportunities with near zero risks.
In a sense, since these bUST would have limited use cases, they would essentially be voting rights to where Anchor deposits not borrowed should go.
As to what your borrowing limit could be would either be somewhat of reputation based, like option A, or purely out of your loan margin deposit for the duration of your loan.
Interest would be market based on supply and demand as the borrowers, even faced with a no-loss scenario, would risk making less returns than the interest on the loan.
*Also, important to mention most of the job would be automatic (you wouldn’t bid manually on collateral), somewhat like the automated process of Spectrum Protocol.
I hope I have sparked some ideas into your brains, we’re all on this journey together and it’s good to share solutions instead of saying this or this can’t work!
Sidenote: I think Peer-to-peer real life loans would also be a way to make good use of those funds.