The big story today is Atomic Loan's seed round of $2.45 million to bridge the gap between bitcoin and the decentralized finance movement taking place on ethereum.
Some big names were involved in the seed round: Initialized (), which invested in Coinbase and Reddit, bitcoin personality Apomp from Morgan Creek, and of course Consensys.
In a nutshell, Atomic Loans allows bitcoin holders to take out stablecoin loans against their holdings in a non-custodial, fully decentralized manner. The big use-case here is for bitcoin miners, as they have fixed monthly costs that are paid in dollars, euros, yen etc....
Miners have to sell some of their mined bitcoin to pay for expenses, which puts downward pressure on the price of bitcoin, but if a miner is able to take out a USDC loan again their bitcoin to pay for expenses, that selling pressure disappears from the markets.
The miners get to kill two birds with one stone here so to speak, as they will avoid taxable events by forgoing the selling of their coins while still profiting from any upside swing in the price of bitcoin.
If this service takes off and is proven to be secure enough for miners to take out loans in the millions of dollars, bitcoin may actually have a realistic chance at taking out the $20k highs.
I was aware of Atomic Loans and what they were doing from Twitter chatter, but I had never bothered to try it out as the platform was still in beta and lenders are by invite only. Today they opened up borrowing, so anyone can give it a test https://atomic.loans/app
Interest rates are high now, up to 10% for USDC and DAI. I'm guessing this is because liquidity is very limited currently.
Rates on credit cards are above 20%, so 10% isn't that bad, especially if bitcoin appreciates more than 10% since the time you took out the loan. In a bull market miners will be profiting even with a 10% interest rate.