Blockchain: It's where you can buy Bitcoin, digital pictures of Bored Apes, and—for a brief time—Teslas.

Also: houses.

USDC.Homes, a company that partners with mortgage lenders and brokers to facilitate crypto home loans, has completed its first sale via DeFi lending protocol Teller.

The new owner took out a $500,000 USDC stablecoin mortgage on an Austin, Texas, condo valued at $680,000.

AD

Teller is calling it the "first unsecured DeFi mortgage;" the borrower didn't put up collateral (though he did make a down payment in USDC) but won the loan on the strength of his credit score.

Moreover, Teller says that all of the loan transactions took place on-chain via Polygon's Ethereum sidechain for making transactions faster and cheaper.

Unpacking crypto mortgages

The upside of crypto mortgages is that those who hold a lot of digital assets don't need to liquidate their holdings to buy a home—which would trigger capital gains taxes.

Decentralized finance loans–which enable people to lend and borrow via a computer program without using a bank or other intermediary—have typically required collateral. This means that to get a loan in crypto, you have to first deposit a certain amount. If the price of the cryptocurrency drops too much, the protocol can then cash out your deposit to avoid a loss.

AD

Teller, by contrast, specializes in no-collateral lending by mingling on-chain lending with off-chain data, such as credit reports.

To Teller founder and CEO Ryan Berkun, it blends the best of both worlds: "This innovative mortgage loan market, built on the Teller protocol, integrates a mainstream user experience with the digital asset backend infrastructure of DeFi."

USDC.Homes has plans to expand beyond Austin to all of Texas and, eventually, the rest of the U.S.

Daily Debrief Newsletter

Start every day with the top news stories right now, plus original features, a podcast, videos and more.