🌊 [Analysis] Superfluid Collateral in Open Finance - Dan Elitzer

Dan Elitzer proposes the notion of “superfluid collateral” in DeFi, the concept that crypto collateral could potentially be leveraged by multiple applications at the same time. $ETH) can't be in two places at once, but it should be possible, for instance, to send ETH to a “deposit token” contract with Compound (an interest-earning money market), then use “Compound ETH” - an ERC-20 contract - as collateral in Maker. It’s a more transparent form of rehypothecation. Dan thinks we could soon see "collateralized collateral collateralizing collateralized collateral.” That has obvious pros and cons.

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