Interesting issues raised by a $50k loan made on a dapp secured by an NFT representing ownership of a Richard Millie watch. Is this effectively an unsecured loan?

Someone made a $50k loan against an NFT representing ownership of a Richard Millie watch. I think this may be an effectively unsecured loan meaning the borrower may be able to default on the loan and not have to give up his watch... Just the NFT. A smart contract can enforce the transfer of the NFT if the borrower defaults but obviously a smart contract can't enforce the transfer of the watch itself.

Basically the loan is secured by something that represents that the borrower owns this watch. Transferring that NFT just means that the lender now owns an NFT that represents that the borrower owned that watch. Maybe there is a mechanism to make sure the watch itself is transferred (the lender posted about this but didn't clarify this point so I'm not sure). The watch would probably need to be in the possession of a third party to make this a possibility and that also wasn't reported.

Another question is who authenticated this watch? I hope this was done in person and by a specialist. This also wasn't reported so I don't know.

Another question is what prevents the borrower from minting many NFTs representing ownership in this same watch (potentially on different platforms) and borrowing against it again and again?

Still an interesting transaction but raises a lot of questions about the interaction between smart contracts and RWA (real world assets). Another question is how smart contracts will interact with the regular legal system if someone tried to enforce against a loan made on a smart contract in a court. I have a feeling a court might determine that it doesn't have the legal framework to allow repossession of a real world asset used as collateral for a loan on DeFi. This may change but courts and law move slowly. Loan against RWA at your own peril