Collateralized Loans
- A simple or small idea with big potential.
- Collateralized loans allow you to borrow funds against assets held in a Bank, or in the case of Polycub, a DeFi project.
- I am excited to describe for you an opportunity coming soon to PolyCub, a decentralized project on Polygon, created by the Leofinance community development team. Leofinance is a four year old community here on Hive.
- This opportunity in brief would you require you to deposit Polycub in the XPolyCub vault, and then you would be allowed to borrow a certain amount of Polycub back from this vault, which you could use to buy other cryptocurrency tokens, such as Leo, Hive, Bitcoin or Ethereum.
- This loan would allow you the opportunity to invest in both Polycub and something else. A great way to own two things with the same money.
- ‘Now this is risky, as the loan is dependent on the Polycub maintaining it’s value above a certain price. Other wise your Polycub would be sold to payback what you borrowed.
- ‘However I welcome the prospect of Collateralized loans on Polycub, and I would take advantage of them to buy additional assets to hold.
- ‘However I also wish to support another idea circulating within the Leofinance Community: Collateralized Loans unsing HBD. HBD or Hive Backed Dollar, is the Hive blockchain stablecoin backed by a dollars worth of Hive.
Stablecoin Collateralized loans
- This means the collateral for such loans is a stablecoin like HBD the Hive Backed Dollar, or USDC, DAI or BUSD.
- I have been using stablecoin collateral loans for months on Venus.io a cryptocurrency bank on Binance Smart Chain, where I deposit BUSD, and borrow Vai the Venus bank stablecoin, and use it to buy tokens on PanCakeSwap.
- Then I invest those tokens on Cubfinance or Polycub.
- None of my loans have been liquidated because my BUSD has maintained its value.
- It is for this reason that I am in favor of stablecoin loans.
- I realize that thanks to Terraluna and the collapse of their stablecoin UST, people are not very trusting of Stablecoins these days.
- But I think that is like throwing out the entire barrel of apples because of a few rotten ones.
- I think this type of Collateralized loan is the best one for a bear market, and in some respects any market.
- While it does allow the degree of leverage a volatile token like Bitcoin would allow, it is safer, and it promotes the preservation of investment capitol, which should be a major goal in any market.
What do you think?
@shortsegments
#xpolycub
#x-polycub
#p-hbd
#p-hive
#p-sps
Posted Using LeoFinance Beta
I think the loan is dangerous but it will at least allow the people on PolyCUB to take out money against their position. It's too bad that the bear market has shown the dangers of taking loans against the current price.
Posted Using LeoFinance Beta
All loans are dangerous if they are based on volatile assets. The Stablecoins show us this.
Posted Using LeoFinance Beta