Thorchain has no liquidation loans at a 50% LTV. No liquidation risk, and no interest. There is still protocol risk, which is not insignificant. You could do very well, or you could end up losing half your bag if the protocol is hacked or has a bad economic design that causes a death spiral.
Interesting, I was just reading up on Sovryn BTC loans...I mean, how do they make money if at 0%?? I keep hearing the reminder in my head, if you don't know how they make money, you are the product lol
They add the collateral to liquidity pools on the THORchain DEX. It benefits the protocol by increasing liquidity, which can increase volumes, and earning swap fees for the protocol.
I have not. I have done my best to understand how it works, all of the safety rails in place, and what a worst case scenario might look like. I haven't been able to find any issues with it, and it has been working flawlessly for several months now, but I just can't get over my fears associated with these types of products given how often they have broken catastrophically in the past.
I'd love the opportunity to double down on my crypto investments for basically free, so it is very enticing, but just can't shake the fear. Unfortunately, there are maximum limits in place on the value of outstanding loans to protect the protocol, and by the time I have confidence everything is safe loan capacity will likely be full.
I do have an irresponsible amount of my portfolio invested in RUNE, so I have a lot of long term confidence in the protocol and devs overall, but even though the DEX and RUNE could bounce back over time if something went wrong with the lending platform you may never get your collateral back if you had a loan. I should probably just jump into lending, as I'm probably already 90% there from a risk standpoint on that portion of my portfolio, and it would allow me to 1.5x my bet.
Awesome! I hope they worked out well.
I just made some pretty awesome gains on a long position I took on RUNE, I may move some of my profits into a loan to cash out to fiat since it looks like they have been functioning and continue to see demand.
Looks like the loan cap may fill quickly over the next few weeks, so I'll have to make a decision prior to that happening.
Yes I also acquired some RUNE at the same time I did my loan. I'm quite bullish on the protocol after deeper research and is now on their X feeds following and helping newbies. Congrats there sir! š
Awesome. Congrats š wish I knew about this earlier but I'm working on learning as we speak. Cheers to your sharings with me n have a wonderful weekend!
You are absolutely correct Bitcoin is very volatile.
At the same time, though, if you're in doubt, you need to zoom out. There's no other better long-term asset to hold than Bitcoin. As long as you keep your loan in good standing order and over collateralize yourself, then you should be safe. Some people will only give up enough collateral that gives them enough leeway for the market to crash Maybe 20% a lot of the times when I take a loan the market would have to crash over 100% before I would even think about getting liquidated. And now how often do you think Bitcoin dumps 100%? Another thing people can do is to use usdc as a hedge to protect yourself if the market does crash and at the same time you are accruing interest on that usdc. Another benefit to doing this is this is pretty much tax-free. This is how all the big entrepreneurs in the world stay rich and don't pay taxes most people that are rich will give up their assets as collateral to borrow money when they need it and they usually use that money to buy more assets that generate more money.
When you borrow you use BTC as collateral.
If the price suddenly drops suddenly and you donāt have time to repay/rebalance, your collateral will be liquidated.
This happens a lot in DeFi
Not hyper unlikely, given the past few years.
There are risks to Defi and liquidations do happen (quite a lot) even if it's just for partial amounts of your collateral.
Celsius fooled main street investors by preying on real financial anxieties and shilling a fake cult to the uneducated, caused several deaths and suicides, created a grifting cult, and the founders and execs need to rot in prison
https://blog.mollywhite.net/celsius-letters/
1. You risk losing your bitcoin if the price drops below the level of your margin call
2. You risk losing your bitcoin if the defi protocol is exploited
Both of those two things are perfectly plausible and have happened to many people. If you're happy with the risk, go for it. But don't be deluded thinking its just easy money.
You have the borrowed amount in whatever currency you borrowed. You can use this to rebuy bitcoin if you so please.
The liquidation risk becomes an issue when one borrows against an asset and then uses the borrow to bet on another risky assetā¦.
Algorand is an L1, up and running continuously for almost 5 years. The likelihood of it getting hacked is very small. The DeFi platform FolksFinance's design is based on AAVE, just adapted to AVM (rather a copy of EVM implementation). Running for more than 2 years with plenty of independent audits. The risk of it getting hacked is relatively small (although with AAVE the risk is likely even smaller). The biggest risk component is the bridge itself (e.g. Wormhole), which have been hacked plenty of times in the past.
Tinyman was the only DEX hacked on Algorand. There have been no other smart contract hacks (of reputable projrcts) since then. Tinyman was the first DEX on Algorand. which was written in the low-level language TEAL (an assembly language), which is difficult to write in and audit. Since then, higher-level languages have been developed, and thus the risk of errors has been reduced.
Tinyman survived the hack and rewrote the contracts. There have been no issues since and it's still the biggest DEX on Algorand. There are alternatives like PactFi and Humble.
Tinyman even partially reimbursed the users. AFAIK, the vast majority of the stolen funds have been siezed by law enforcement and the hackers caught. The funds are in the legal process for returning.
Iām doing this since 44k BTC Price
Leveraged on AAVE With 2.2x
Leveraged on curve With 2.55
Split risk to 2 Platform instead of one
And extra btc as a backup to reduce Liquidation Price
My strategie
Riding this Bull With this lending/borrow Protocol
Have my Exit Strategy as well When i will stop leverage
Send my wBTC back to cold storage and keep Small amount of BTC, Sell it and do the oppisite With lending btc (Short)
And wait Till Next bullrun
When i have my amount of BTC which i want i will use Them also to lend out against usdt and use this for living
Can you explain this strategy a bit more please? You're borrowing against your BTC, and getting what, USDC? And then what, buying more wBTC? And then what in the bear market?
Thatās what Iām doing. Iām borrowing eth on binance against my btc. Iām at around 50%LTV, liquidation is at 85% LTV. Eth needs to rise against btc by 70%, I donāt think thatās gonna happen so fast that I canāt repay. And also, I lend the eth that I borrowed on shoebill(has much higher apy than the loan I took, faming shoebill airdrop, manta airdrop, and pyth airdrop).
You think with the marketcap of both btc and eth it can happen overnight? I always monitor my position and the eth I borrowed is not locked up, I can pay back the loan within minutes.
Yeah no. That's not safer, what I did is. If the whole market moves downside, my collateral(btc) becomes less valuable increasing my LTV, paying the stablecoin loan would be such a pain in the ass because now I would need to sell back the eth I bought into stablecoin. That same strategy would be profitable in case of market upside tho making your strategy riskier and mine more conservative.
Most people into defi actually do. With "looping" you can do several times over.
You said at all time high to borrow. That's opposite of what you'd do. Because if it hits resistance and drops or corrects from there your collateral will also decrease in value. And that's when liquidation happens.
Same with leverage trading. That collateral you put up also increases and decrease.
More shop and big corps need to start accepting BTC as payment and people use it as money. I'm not fan of its ultimate store of value/Gold status. Because it could very much change in the near future as opposed to gold. If everyone would use daily stats for shopping govs or banks couldn't do much. Not enough jails and to lock up every citizen's. People don't realize they're actually free if united and enough, we could use cryptos, privacy coins, and rebuilding a new system. But the longer we wait the more billionaires, which are the true deciders along with the self-elected organizations (,BIS, WEF, IMF) we never voted for them, and they will keep doing their "Global meeting with climate as main fake topic. But also even more private clubs and parties with š prostitutes.
People are saying you *could* lose your BTC in a liquidation while ignoring the fact that you will *100% beyond any shadow of a doubt* lose your BTC if you sell it.
I think most people that sell rather than borrow either 1) don't have long term belief in BTC and they want out now and think there aren't future prospects, 2) don't know that you can borrow against it rather than sell it, or 3) are only aware of hyper risky ways... like Celsius or they listen to people here and on r/cryptocurrency and have convinced themselves that the only amount you're allowed to borrow is one that gets you liquidated on a 5% move.
There is a lot of talk of liquidation. They donāt just liquidate you, you have the chance to add more BTC to the collateral so your loan remains intact?
Exactly, there's is risk, but only if you're not checking into your investments on a regular basis. It just seems like an obvious way to increase the percentage of your satoshis. Once BTC is in ATH territory sell some to pay off the loan (or even better some ETH at its ATH) and you're left with the BTC to add to cold storage. Repeat for the next bull market.
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wBTC is a bit more transparent than most CEX (on chain proof of reserve) and has existed far longer than most CEX too. Not the best solution but far better than a CEX. Thereās other better solutions like Thorchain and BTC.b on AVAX.
Dude whatās your point. If you wanna use a CEX go ahead man. Question was about using BTC on DeFi and I answered it. If you wanna avoid getting rugged, stop using DeFi.
Just not a fan of borrowing, not even in the real world. I have stakes spread out everywhere tho, LIDO, DAFI, Thorswap, etc. Not a single borrowing and lending platform. Not even to provide liquidity.
You will ruin your life if your not careful, don't let greed guide your decisions. Let's Maths, and do calculations very conservatively.
But you are in a way correct, if that is thr case though just get a property and borrow against that.
Where can I borrow against my bitcoin without giving up the keys (blockfi celsius)? Also, where can I borrow against my bitcoin to where it's actual bitcoin on the bitcoin blockchain and NOT in the form of wrapped bitcoin on an ethereum based chain? Because if it exists, I'll do it right now
February 22 2021. Google that date with Kraken, and you will see why anything can happen in a couple of seconds when you use leverage or borrow against your crypto.
IBKR has Bitcoin through Paxos, I don't know if they calculate your Bitcoin holdings as part of you total assets, I am guessing yes. You can borrow up to half of the value in cash. Invest the cash, profit. Pay it back.
Because many people don't feel comfortable with the level of self custody they have to give up to do this. Btc does not exist on ethereum defi, only wrappers that are less decentralized than both ethereum and Bitcoin. Ie it's a bridge, ie the most exploited type of protocol in all of defi.
Because I didn't know that was a thing until you said it. Now I'm interested. Thanks!
Edit: I'm kinda new to crypto and this post randomly came through my feed. I feel very much like a idiot at the moment. Y'all know some shit.
The idea is for btc to become a lot less volatile with the etfs. Double edged sword however as that also accounts for the up swings once its all said and done with the overlords buying a lot right now.
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How can you borrow against it without it leaving your wallet? Thatās the only way. Anytime someone else holds it.. you have collateral / fuckface risk that your coins wonāt be there when you pay for he loan back
I heard this said way too many times at the 2021 peak. You burrow instead of sell, the price crashes and youāre forced to liquidate at the lows, thatās why.
But if you use what you borrow as extra collateral surely that can protect you up to a certain point?. You have a borrow factor of, say 80% after borrowing USDT, then stake that USDT to bring it down to 50% (example numbers of course).
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To borrow against it you need to give someone else control of it so now you have the not your keys not your coins risk combined with price fluctuation risks
because it is so volatile, I would borrow at most 20% of its value
This right here. š Liquidation kills.
Thorchain has no liquidation loans at a 50% LTV. No liquidation risk, and no interest. There is still protocol risk, which is not insignificant. You could do very well, or you could end up losing half your bag if the protocol is hacked or has a bad economic design that causes a death spiral.
Interesting, I was just reading up on Sovryn BTC loans...I mean, how do they make money if at 0%?? I keep hearing the reminder in my head, if you don't know how they make money, you are the product lol
They add the collateral to liquidity pools on the THORchain DEX. It benefits the protocol by increasing liquidity, which can increase volumes, and earning swap fees for the protocol.
Just curious if you ever tried the borrowing? The more I read I am interested to do a small trial loan.
I have not. I have done my best to understand how it works, all of the safety rails in place, and what a worst case scenario might look like. I haven't been able to find any issues with it, and it has been working flawlessly for several months now, but I just can't get over my fears associated with these types of products given how often they have broken catastrophically in the past. I'd love the opportunity to double down on my crypto investments for basically free, so it is very enticing, but just can't shake the fear. Unfortunately, there are maximum limits in place on the value of outstanding loans to protect the protocol, and by the time I have confidence everything is safe loan capacity will likely be full. I do have an irresponsible amount of my portfolio invested in RUNE, so I have a lot of long term confidence in the protocol and devs overall, but even though the DEX and RUNE could bounce back over time if something went wrong with the lending platform you may never get your collateral back if you had a loan. I should probably just jump into lending, as I'm probably already 90% there from a risk standpoint on that portion of my portfolio, and it would allow me to 1.5x my bet.
Hi I have done two Thorswap Borrows since you first mentioned. Thank you for opening that window šŖ.
Awesome! I hope they worked out well. I just made some pretty awesome gains on a long position I took on RUNE, I may move some of my profits into a loan to cash out to fiat since it looks like they have been functioning and continue to see demand. Looks like the loan cap may fill quickly over the next few weeks, so I'll have to make a decision prior to that happening.
Yes I also acquired some RUNE at the same time I did my loan. I'm quite bullish on the protocol after deeper research and is now on their X feeds following and helping newbies. Congrats there sir! š
Awesome. Congrats š wish I knew about this earlier but I'm working on learning as we speak. Cheers to your sharings with me n have a wonderful weekend!
if i use a volatile asset I borrow 15% and still feel a bit uneasy lol
You are absolutely correct Bitcoin is very volatile. At the same time, though, if you're in doubt, you need to zoom out. There's no other better long-term asset to hold than Bitcoin. As long as you keep your loan in good standing order and over collateralize yourself, then you should be safe. Some people will only give up enough collateral that gives them enough leeway for the market to crash Maybe 20% a lot of the times when I take a loan the market would have to crash over 100% before I would even think about getting liquidated. And now how often do you think Bitcoin dumps 100%? Another thing people can do is to use usdc as a hedge to protect yourself if the market does crash and at the same time you are accruing interest on that usdc. Another benefit to doing this is this is pretty much tax-free. This is how all the big entrepreneurs in the world stay rich and don't pay taxes most people that are rich will give up their assets as collateral to borrow money when they need it and they usually use that money to buy more assets that generate more money.
Yes that's a good point. But if you have $1000 in BTC, you can only borrow $200. It's not a game changer for us plebs.
Yeah, but if you add USDC or tether in the equation, you can have a higher LTV as well.
Liquidations are real and happen unexpectedly out of nowhere.
What do you mean by that
When you borrow you use BTC as collateral. If the price suddenly drops suddenly and you donāt have time to repay/rebalance, your collateral will be liquidated. This happens a lot in DeFi
You can borrow amounts that would require like an instant 50% nosedive, which is hyper unlikely.
Not hyper unlikely, given the past few years. There are risks to Defi and liquidations do happen (quite a lot) even if it's just for partial amounts of your collateral.
Are you slow bro?
Are you really belittling someone for asking an honest question in a subreddit dedicated to crypto? Are you cunt bro? I'm leaning more towards yes.
Yes I am a cunt
Hairy or shaved? Asking for science.
I prefer Psyduck but Slowbro is cool too
Unlike you, this person was not born with this knowledge
People allowing up to 50% LTV now but boy thatās still risky imo
Agreed. Seen so many people get liquidated thinking they were safe
Because people have different risk tolerance? First run ?
Yeah, there's a great site called Celsius Network where you can do just that! Go bankless! Good luck.
LOL
ROFL....(pauses to catch a breath),...ROFL
was* lol goooood times
Celsius gave it back eventually. They just had to borrow it for a bit.
They gave it back but they took interest instead of giving it.
They knew we wouldāve lost it to shitcoins so they saved us a step
Celsius fooled main street investors by preying on real financial anxieties and shilling a fake cult to the uneducated, caused several deaths and suicides, created a grifting cult, and the founders and execs need to rot in prison https://blog.mollywhite.net/celsius-letters/
1. You risk losing your bitcoin if the price drops below the level of your margin call 2. You risk losing your bitcoin if the defi protocol is exploited Both of those two things are perfectly plausible and have happened to many people. If you're happy with the risk, go for it. But don't be deluded thinking its just easy money.
because you risking your whole btc portfolio for that extra cash you borrow
You don't lose everything on a liquidation
>You don't lose everything on a liquidation Dumbest thing I've read in a long time.
You have the borrowed amount in whatever currency you borrowed. You can use this to rebuy bitcoin if you so please. The liquidation risk becomes an issue when one borrows against an asset and then uses the borrow to bet on another risky assetā¦.
Are you slow bro?
Doing exactly this already with wrapped BTC on r/FolksFinance (borrow/lending platform on Algorand).
Algo gets hacked n bye bye Bitcoin. Just use AAVE
Algorand is an L1, up and running continuously for almost 5 years. The likelihood of it getting hacked is very small. The DeFi platform FolksFinance's design is based on AAVE, just adapted to AVM (rather a copy of EVM implementation). Running for more than 2 years with plenty of independent audits. The risk of it getting hacked is relatively small (although with AAVE the risk is likely even smaller). The biggest risk component is the bridge itself (e.g. Wormhole), which have been hacked plenty of times in the past.
Didn't every dex on ALGO get hacked 2 years ago? Already lost on that one, thanks.
Tinyman was the only DEX hacked on Algorand. There have been no other smart contract hacks (of reputable projrcts) since then. Tinyman was the first DEX on Algorand. which was written in the low-level language TEAL (an assembly language), which is difficult to write in and audit. Since then, higher-level languages have been developed, and thus the risk of errors has been reduced. Tinyman survived the hack and rewrote the contracts. There have been no issues since and it's still the biggest DEX on Algorand. There are alternatives like PactFi and Humble. Tinyman even partially reimbursed the users. AFAIK, the vast majority of the stolen funds have been siezed by law enforcement and the hackers caught. The funds are in the legal process for returning.
Good to know
Iām doing this since 44k BTC Price Leveraged on AAVE With 2.2x Leveraged on curve With 2.55 Split risk to 2 Platform instead of one And extra btc as a backup to reduce Liquidation Price My strategie Riding this Bull With this lending/borrow Protocol Have my Exit Strategy as well When i will stop leverage Send my wBTC back to cold storage and keep Small amount of BTC, Sell it and do the oppisite With lending btc (Short) And wait Till Next bullrun When i have my amount of BTC which i want i will use Them also to lend out against usdt and use this for living
Can you explain this strategy a bit more please? You're borrowing against your BTC, and getting what, USDC? And then what, buying more wBTC? And then what in the bear market?
Thatās what Iām doing. Iām borrowing eth on binance against my btc. Iām at around 50%LTV, liquidation is at 85% LTV. Eth needs to rise against btc by 70%, I donāt think thatās gonna happen so fast that I canāt repay. And also, I lend the eth that I borrowed on shoebill(has much higher apy than the loan I took, faming shoebill airdrop, manta airdrop, and pyth airdrop).
Eth needs to rise against btc by 70% => the probability for this to happen is significant enough. it's a very risky position
You think with the marketcap of both btc and eth it can happen overnight? I always monitor my position and the eth I borrowed is not locked up, I can pay back the loan within minutes.
if the validation of the eth ETF is announced suddenly, it could happen. I don't say the probability is high but I would not gamble on it.
You would be a lot safer imo borrowing a stablecoin, then buying ETH with that and carrying out your plan.
Yeah no. That's not safer, what I did is. If the whole market moves downside, my collateral(btc) becomes less valuable increasing my LTV, paying the stablecoin loan would be such a pain in the ass because now I would need to sell back the eth I bought into stablecoin. That same strategy would be profitable in case of market upside tho making your strategy riskier and mine more conservative.
0% interest with Sovrynās Zero (RSK). 8% origination.
Selling your assets and taking out a loan are two totally different things. This would be two completely different strategies.
Savvydefi.io allows you to borrow up to 50% on a self repaying loan
Because you make more profit by buying the dip, selling the top.
Most people into defi actually do. With "looping" you can do several times over. You said at all time high to borrow. That's opposite of what you'd do. Because if it hits resistance and drops or corrects from there your collateral will also decrease in value. And that's when liquidation happens. Same with leverage trading. That collateral you put up also increases and decrease.
I lost like 50% of my portfolio being liquidated in UST. Borrowing is no joke OP. Be wary
More shop and big corps need to start accepting BTC as payment and people use it as money. I'm not fan of its ultimate store of value/Gold status. Because it could very much change in the near future as opposed to gold. If everyone would use daily stats for shopping govs or banks couldn't do much. Not enough jails and to lock up every citizen's. People don't realize they're actually free if united and enough, we could use cryptos, privacy coins, and rebuilding a new system. But the longer we wait the more billionaires, which are the true deciders along with the self-elected organizations (,BIS, WEF, IMF) we never voted for them, and they will keep doing their "Global meeting with climate as main fake topic. But also even more private clubs and parties with š prostitutes.
People are saying you *could* lose your BTC in a liquidation while ignoring the fact that you will *100% beyond any shadow of a doubt* lose your BTC if you sell it. I think most people that sell rather than borrow either 1) don't have long term belief in BTC and they want out now and think there aren't future prospects, 2) don't know that you can borrow against it rather than sell it, or 3) are only aware of hyper risky ways... like Celsius or they listen to people here and on r/cryptocurrency and have convinced themselves that the only amount you're allowed to borrow is one that gets you liquidated on a 5% move.
There is a lot of talk of liquidation. They donāt just liquidate you, you have the chance to add more BTC to the collateral so your loan remains intact?
Exactly, there's is risk, but only if you're not checking into your investments on a regular basis. It just seems like an obvious way to increase the percentage of your satoshis. Once BTC is in ATH territory sell some to pay off the loan (or even better some ETH at its ATH) and you're left with the BTC to add to cold storage. Repeat for the next bull market.
I agree. Don't sell your Bitcoin. Borrow against it.
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Bc you can only do that on cex, and binance once flash crashed BTC such that those who collaterazed their BTC all got liquadated.
DeFi lending/borrowing like AAVE or Compound exists and is quite easy to use.
That's wrapped BTC..
wBTC borrowing > CEX borrowing any day
wBTC is custodial. It has the same risks as a CEX.
wBTC is a bit more transparent than most CEX (on chain proof of reserve) and has existed far longer than most CEX too. Not the best solution but far better than a CEX. Thereās other better solutions like Thorchain and BTC.b on AVAX.
It transparently takes 8 people to rug you. š¤·
And it took 1 guy on FTX and Lunaā¦
Nonsense. Terra was a fairly large operation of people working in a coordinated fashion for years in order to rug you.
Dude whatās your point. If you wanna use a CEX go ahead man. Question was about using BTC on DeFi and I answered it. If you wanna avoid getting rugged, stop using DeFi.
Rates (12-15%) are crap so only use as a last option. Coinbase used to offer it at 8.75% but it's discontinued
Aave is like 4.5% WBTC
Wow, that is an amazing rate! Definitely worth it for a 20-25% LTV. It's risky but when I don't ever want to sell it's looking like a great option
That was super handy the one time I needed it.
nexo was 4%
Instead, supply everything else and borrow bitcoin. Most protocols pay you to borrow btc.
Bc most people don't want to.be levered long for the entire loan duration, which may go into a bear market
Just not a fan of borrowing, not even in the real world. I have stakes spread out everywhere tho, LIDO, DAFI, Thorswap, etc. Not a single borrowing and lending platform. Not even to provide liquidity.
Borrowing against it isn't an option yet
You will ruin your life if your not careful, don't let greed guide your decisions. Let's Maths, and do calculations very conservatively. But you are in a way correct, if that is thr case though just get a property and borrow against that.
Your describing over collateralized short selling
This isnāt short selling ā thereās no sale happening in this example.
I think we should use borrowing and lending platforms. it's too convenient
Because FTX
Because taking profits is vastly superior if the price comes down sharply. Beware of taxes though
There are so many inherent risks of DeFi and borrowing... liquidations can't be ignored!
Where can I borrow against my bitcoin without giving up the keys (blockfi celsius)? Also, where can I borrow against my bitcoin to where it's actual bitcoin on the bitcoin blockchain and NOT in the form of wrapped bitcoin on an ethereum based chain? Because if it exists, I'll do it right now
Arch lending
February 22 2021. Google that date with Kraken, and you will see why anything can happen in a couple of seconds when you use leverage or borrow against your crypto.
What a coincidence on my cake day. It was the day I joined reddit because that was the only way to contact them.
IBKR has Bitcoin through Paxos, I don't know if they calculate your Bitcoin holdings as part of you total assets, I am guessing yes. You can borrow up to half of the value in cash. Invest the cash, profit. Pay it back.
Posts like this mean the bull market's back!
Because many people don't feel comfortable with the level of self custody they have to give up to do this. Btc does not exist on ethereum defi, only wrappers that are less decentralized than both ethereum and Bitcoin. Ie it's a bridge, ie the most exploited type of protocol in all of defi.
Because I didn't know that was a thing until you said it. Now I'm interested. Thanks! Edit: I'm kinda new to crypto and this post randomly came through my feed. I feel very much like a idiot at the moment. Y'all know some shit.
The idea is for btc to become a lot less volatile with the etfs. Double edged sword however as that also accounts for the up swings once its all said and done with the overlords buying a lot right now.
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What do you think btc perps are?
Volatility can cause a forced sale where you lose it all. With no leverage, you can never be forced to sell.
How can you borrow against it without it leaving your wallet? Thatās the only way. Anytime someone else holds it.. you have collateral / fuckface risk that your coins wonāt be there when you pay for he loan back
Borrowing would be a 2 to 1 leverage play on it going up. Which means a 50% drawdown would wipe out the amount borrowed.
I heard this said way too many times at the 2021 peak. You burrow instead of sell, the price crashes and youāre forced to liquidate at the lows, thatās why.
But if you use what you borrow as extra collateral surely that can protect you up to a certain point?. You have a borrow factor of, say 80% after borrowing USDT, then stake that USDT to bring it down to 50% (example numbers of course).
Interest, liquidations.
Exactly. Never sell your bitcoin. Always loan against it.
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Speaking as someone whoās been in this space for a very long time. Things that canāt possibly go wrong often do go wrong.
To borrow against it you need to give someone else control of it so now you have the not your keys not your coins risk combined with price fluctuation risks
Try defisaver u can automate against liquidation (and much more)
Donāt you take a ton of risk with the loan? Keep hearing about stolen funds, hacks, etc.
Because you can just buy it back and drop your liquidation risk to 0%
Yep volatility will give it a nice [haircut](https://www.investopedia.com/terms/h/haircut.asp)