On some of the Leofinance AMA's of late @khaleelkazi spoke about using bitcoin as collateral for loans through the MakerDAO protocol.
There are several options on what a platform to use though. Aave is probably the most popular. I decided to use Oasis.
wBTC
The screenshot above is just a few of the tokens that can be put up as collateral. For bitcoin, it needs to be wrapped bitcoin since this platform function on the ethereum protocol.
Let me access my bitcoin value without selling it, please ser!
So, loans on Oasis can generate DAI. Thus if one wanted to get some of the value in bitcoin they hold liquid without having to sell then this is an option.
There is a wide range on the percentage loan you can take, which also determines how high or low your liquidation price would be.
If you go with the minimum loan, then liquidation will be roughly 50% lower than bitcoin's current value. Speaking of minimums; there is a minimum loan amount of 3,500 DAI. So if you are thinking of doing this, be sure you have more than that value held in bitcoin.
There is also the risk that you are now holding wrapped bitcoin rather than true native bitcoin, but given it's the ethereum derivative I would think that risk is lower compared to other chains.
As the price of bitcoin goes up, these loans will look tastier and tastier, atleast for this cat!
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Knowledge is power.
There are so much we can do with crypto these days.
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It really is awesome all that we can do.
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The automation of defi is a key to mass adoption. Thanks for the info cat.
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