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> So the stability fee you pay is 4.50%. The fees I am seeing on Uniswap/Aave are much much higher than 4.5%. Even at 4.5% that equates to six figures of addit

by rank0 6y ago

> So the stability fee you pay is 4.50%. The fees I am seeing on Uniswap/Aave are much much higher than 4.5%. Even at 4.5% that equates to six figures of additional interest payments over my 30 year mortgage. > and you didn't have to pay a capital gains tax. This isn't true. Any conversion between crypto assets is technically a taxable event...even if we both can agree that the rules are silly. > Eventually, some companies are working on tokenizing homes, so once that happens, you could potentially deposit that as collateral just as easily, but that's still far out. Okay great, but how does this promised future development help me secure a loan for the home I want to buy? Or the business I want to start? Again, I do not have 500k in bitcoin laying around nor a "tokenized home." It was super easy to get approved for a 500k mortgage just based on my income.

DennisP 6y ago
The idea is that it's not a conversion, it's a loan. The collateral is held in a smart contract and when you pay off the loan you get it back. In much the same way, people take out loans on their stock portfolios, and they don't pay capital gains either.
- rank0 6y ago
  Is there any definitive source on this? I get lots of conflicting information from my brief google search. Equities and Cryptocurrencies are not treated the same for tax purposes by the IRS. It seems like they are treated as property and do not qualify as a "fungible" asset like stock or USD.
  - DennisP 6y ago
    I don't know and I haven't consulted a CPA, which is why I described it as an "idea" instead of a fact. I know technically how it works, but not how the IRS will view it. But to my amateur mind, treating it as property doesn't seem like a problem for this view. If you get a loan from a pawn shop, you're not selling them your property, you're just putting it up for collateral while you pay back the loan.

by rank0 6y ago

DennisP 6y ago

The idea is that it's not a conversion, it's a loan. The collateral is held in a smart contract and when you pay off the loan you get it back. In much the same way, people take out loans on their stock portfolios, and they don't pay capital gains either.

rank0 6y ago
Is there any definitive source on this? I get lots of conflicting information from my brief google search. Equities and Cryptocurrencies are not treated the same for tax purposes by the IRS. It seems like they are treated as property and do not qualify as a "fungible" asset like stock or USD.
- DennisP 6y ago
  I don't know and I haven't consulted a CPA, which is why I described it as an "idea" instead of a fact. I know technically how it works, but not how the IRS will view it. But to my amateur mind, treating it as property doesn't seem like a problem for this view. If you get a loan from a pawn shop, you're not selling them your property, you're just putting it up for collateral while you pay back the loan.