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by bnralt
1521 days ago
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> They are the equivalent of remortgaging your home to get cash. It's actually the opposite of remortgaging a home to get cash. Remortgaging a home to get cash is paying a premium to increase the amount of liquid assets available to you; this is the point of most loans. A DeFi loan is paying a premium and _decreasing_ the amount of liquid assets available to you. As you said, it's useful for juicing speculation, worthless for anything else. > You get a stable and guaranteed >5% without all the risks of the stock market. I think the long-term risks are actually greater than something like an index fund, since your collateral is all in crypto. The returns are also less than historical index fund returns. |
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No, because from their point of view the crypto they put as collateral is NOT liquid. the entire point is do not sell them but somehow get cash from it.