Labor Day weekend wasn’t so great. All 6 .eth-backed loans that were due on September 3rd defaulted. That takes my streak to 9 defaults in a row with 3 more loans coming due on the 5th. Of the 9 defaults, 6 were on Teller, 2 on NFTfi, and 1 on Arcade.
Did these names have anything in common? Let’s see:
1. Had no eth, name expires in 2 months
2. Had no eth, name expires in 4 months
3. Had no eth, name expired during loan
4. Had no eth, name expired during loan
5. Had no eth, name expires in 2 days
6. Had no eth, name expires in 2 months
7. Had no eth, name expires in 3 months
8. Had no eth, name expires in 3 years
9. Had no eth, name expired during loan
The pattern is consistent with a theory I published just a few days earlier, that if a borrower is broke, the ENS loan may be headed toward default. While it doesn’t mean that all borrowers with 0 eth in their wallet won’t pay, it seems to be a pretty good indicator that this will be the end result. The lesson I’ve learned here is that unless I really really want to end up with the name at the end of the transaction, then it probably doesn’t make sense to do the loan.