Will any member of the Manifold community in good standing default in bad faith on a mana loan?

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What counts as a member of the Manifold community in good standing? Does some account that just joined count?

@IsaacKing Not if they're just some rando

What's the cut-off date?

@MichaelWheatley The closing date of the market, the end of 2025.

What determines "good standing" ? I imagine anyone who defaulted on a loan in bad faith would no longer be in good standing?

"Good standing" and "Bad faith" need to be defined

I'd bet that someone defaults on a loan. Bad faith is less likely though? Unless taking excessive risk = bad faith? e.g. if Isaac borrowed mana from loads of people to win the whales/minnows market, and still lost, would that be bad faith? It's an aggressive risk but you could probably reasonably expect him to do it if you were lending him mana right now. Bad faith seems almost impossible to determine (unless they can afford to repay but are refusing to, which seems better described as a scam)

Unless I'm misreading, this is a market about "Will someone scam someone", because realistically you would only lend mana to someone reasonably trustworthy (or in good-standing as you put it) meaning almost every instance of a loan should qualify, unless it's just a small loan to a stranger.

Idk I hope that gets my point across - I can't really bet on this market without more clarification

@Gen I think for a default to be in good faith the risks would have to be made clear: "By the way, I don't have the portfolio size to pay this back and I've made a personal commitment never to spend real money on this site, so you're taking on a legitimate risk here."

If you're borrowing mana to take a big risk, knowing you won't pay it back if the gamble doesn't go your way, that would imply a very different interest rate than someone whose going to sell positions or buy mana to pay it back. This isn't like borrowing money to found a startup, the quantities here are typically pretty small, so paying loans back shouldn't be a very big ask.

The other scenario I can think where a default would be good faith is if unlikely events somehow destroy the collateral: "I know you thought I could always repay you by liquidating parts of my portfolio, but then some Trump stuff happened and some Elon Musk stuff happened, and now my portfolio can't make up the shortfall."

@MichaelWheatley But if they have negotiated a higher rate because of higher risk, I would consider that default to be good faith, as you have said.

Yeah, then the question then becomes how reckless someone must be for it to be considered bad faith. If I'm loaning mana I might expect someone to collateralise one of their markets (future mana). OR, as you say, negotiate USD backup collateral. I would consider someone agreeing to either of those things and not doing it a bad faith default for sure. Those are (to me) examples of fraud - either making false promises or misrepresenting liquidity.

I could also see "bad faith" being that someone borrows money many times, to the point where explicit terms are no longer given because it is generally accepted that they will repay. If that person is then extremely reckless (all-in on a market that is resolved based on a real-world coin flip) I would consider that a bad faith default if they have no intention of repaying the loan if it loses (it's implicit from earlier arrangements that they won't default). Having said that, if a random new guy comes along and does the same thing, that's not bad faith, they took a loan and can't repay it. Nothing exceptional there if no specific collateral was required or anything like that. It's difficult to define "bad faith" no matter how you look at it, I'd prefer "breaks explicit terms", "misrepresents liquidity leading to default", "lies about collateral" or something like that (or all of them accepted under the bad faith umbrella).

I have an idea, but I need some examples/clarification from the maker before I can start betting

@Gen I basically agree with what's been said. There can be edge cases, but it basically comes down to if there is an understanding that repayment depends on outcomes, or if it's an absolute promise.

@BenjaminIkuta ok, any examples for what might qualify someone as being in good standing?

@Gen People know you and trust you, you're not just a rando or a troll.

@BenjaminIkuta are we talking approximately the most trusted 10% or users or the most trusted 70% of users?

@MichaelWheatley More like the latter.

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