The problem with Uniswap (or other AMMs such as Balancer or Bancor etc) is that they are capital inefficient liquidity solutions because the LP has to provide value on both sides of the equation. In Bancor and Curve, you can choose to supply value on just one side, but it does not mean it will work just with that. Someone else still needs to cover the other leg, or as in the case of Curve, they convert part of your supplied asset to meet the necessary requirements.

Secondly, the price of both supplied assets also varies in Uniswap. So in the case of real estate backed collateral where it should not be as variable, we face an issue. Technically this can be arbitraged away, but the nature of the slow moving underlying collateral liquidation process means that it would cause more problems in the short run.

And then the question remains, where does the LP even get the collateral tokens at the onset.

To address these issues we have developed an inhouse primitive called the cashbox which serves as a perpetual counterparty to any asset it is configured to. It is a simple pool of insurance money that serves as a liquidation fund on demand.