Part 5/9:
With DeFi, my experience began with using my Bitcoin as collateral to borrow funds. First, since most lending protocols primarily operate on Ethereum, I wrapped my Bitcoin (BTC) to convert it into Wrapped Bitcoin (WBTC), enabling it to function within decentralized finance platforms.
Steps to Borrow:
Convert BTC to WBTC: This can be done using centralized exchanges like Binance or OKX.
Withdraw WBTC: Transfer the WBTC to my decentralized wallet—Rabi in my case.
Deposit WBTC into A: This deposit acts as collateral for my loan. Generally, I aim to borrow about half of the collateral's market value.
At the time I borrowed, Bitcoin was valued at about $82,000. I put in one BTC to borrow around $45,000, an amount that is comfortably below the collateral value.