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by alasdair_ 1481 days ago
>- If the USDT price crashes, buy it up to repay the loan.

What happens if trading is effectively halted, so it's simply no possible to buy the USDT back later?

1 comments

You can do it on a decentralized finance app like compound: deposit a stablecoin you trust (which could be USDC) and borrow Tether, then immediately sell it and put it into something else that earns interest, incl outside crypto. You continue to earn interest on the deposited USDC (currently .86%, Tether borrowing cost is 3.62%, all ignoring Compound rewards). You can borrow against 82% of the deposited USDC, but 70% would be better to cover the interest accumulating and possible temporary spikes in Tether value.

https://compound.finance/markets