Aaron MGDR
Aaron MGDR

Aug 26, 2021

·
1 min read

This may seem like a repulsive idea at first, but it’s something that most of us are already familiar with in banking systems. When taking out a loan from a bank, the bank will evaluate your credit score (reputation collateral), your down payment (liquid collateral), and your current income (ability to deliver). In the case that your credit score is poor, you can supplement it with a higher down payment. In essence, we’re trading reputation for money as interchangeable forms of collateral. Note that this is independent of the borrower’s ability to deliver, which is correlated but measured independently of the borrower’s reputation.

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Cody Born

Even in the current system I can just directly pay to make my credit score higher.

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Aaron MGDR

Aaron MGDR

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