DeFi loans - anyone tried?
- Thread starter 4gNET
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AAVE is the biggest.
alurosu
Elite Member
- Jun 16, 2020
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There are many options I like. The only thing to keep in mind is that you deposit volatile assets in exchange for stable coins. If the value drops significantly you can get liquidated. We recently had a -30% drop in all coins and that can do serious damage to your account. What I'm trying to say is never borrow more than 30% of the coins you lock in. You can do more precise estimations, but you get the idea.
4gNET
Junior Member
- Oct 27, 2019
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So if I have 200% collateral funds in the same crypto then it should be safe (for exchange rates fluctuation) and all I should care is APR?
alurosu
Elite Member
- Jun 16, 2020
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Ah my bad. I thought you wanted to borrow, not to lend. If you are the one that is giving money, then my calculations are not needed. Just lock in your coins and the script will automatically generate returns.
4gNET
Junior Member
- Oct 27, 2019
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I want to borrow
But I guess it would be stupid to borrow without having enough money to payback in the same crypto. If the value will skyrocket the interest rate will be a couple hundred % instead of some acceptable <10% APR.
alurosu
Elite Member
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I was confused for a second because you mentioned APR. APR is relevant only for the ones that lend / the people that give you money in this case.I want to borrow
It's not stupid if you borrow USD. Let's say you have 1 ETH and don't want to sell it, but you need some cash. Your ETH value is 1700 USD right now. You can borrow 500 USD and pay it later. If your ETH increases in price, you will still only have to pay 500 USD in the future + fee.
The fee you pay is related to how many participants are in the smart contract. It's not related to the price of your ETH. Unless there's a project collapse, you should be fine.
SEOking222
Elite Member
- Sep 29, 2012
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"Venus Protocol" is best lending platform, competing with AAVE. You can DYOR but for me, its working cool.
4gNET
Junior Member
- Oct 27, 2019
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But does anyone borrow in USD backed by crypto (for example ETH)?
There are of course stablecoins but they're always over 10%
alurosu
Elite Member
- Jun 16, 2020
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What I meant by USD is any of the stable coins. In this case DAI, USDC, USDT, TUSD. They should all be around 1 USD.