A software engineer has taken decentralized finance to a new level of practicality, by paying off his mortgage with Commonwealth Bank of Australia and refinancing the loan through fixed-charge per unit lending protocol Notional Finance.

The movement marks a major step for the fledgling DeFi sector and more fixed-rate lending protocols in DeFi may attract additional users seeking mostability in longer-term investments and loans, such equally mortgages. Currently, the ecosystem is largely populated by yield farmers looking for quick gains on their crypto collateral.

The DeFi engineer attempted the process through TradFi by seeking an offset loan, which directs a savings business relationship's involvement towards paying down a mortgage.

Speaking to The Defiant, nonetheless, the borrower stated that banks are very cautious well-nigh lending in times of economic incertitude, particularly to those that are self-employed. He added that he had been rejected for a basic credit card for four years.

Notional Finance provides fixed-rate loans for up to half-dozen months for users that deposit crypto collateral in wrapped BTC, ETH, wrapped ETH, or DAI.

The approach was far from simple and user-friendly for noobs, even so. The engineer had to pay off his bank loan first in AUD. He then had to borrow the USD pegged stablecoin USDC from Notional at a fixed rate, providing his own liquidity to avert the slippage and fees on the new depression book platform.

He then added effectually $one 1000000 in wBTC and wETH every bit collateral to Notional against which he borrowed around $500,000 of USDC which was converted to AUD to pay off the bank. He said:

"I feel like I'grand in full control of my situation. People should be all over this stuff."

Borrowing rates on Notional Finance for USDC are approximately 6% only some of that can be recouped by earnings from liquidity provision. There is the added bonus of maintaining a position in a bull market without having to sell crypto avails and incur a majuscule gains effect upon which in that location would have been taxes to pay.

He added that the process was fast compared to traditional finance;

"It felt similar it would've taken months of applications, finding taxation returns and banking company statements for the banking company to refinance me, but I was able to do it all in one day, nether my own agency,"

Leading DeFi protocol Aave has also started downward the mortgage path with its latest partnership. In an proclamation on Feb. 2, Aave stated that the scheme was in collaboration with RealT, a firm that tokenizes existent estate in order to allow users to pale their holding as collateral to have out loans. The power to use these assets as collateral is the start step in making "mortgage" loans on Ethereum bachelor to a wider audience.