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Most sites are now requiring 2x collateral for a loan, IE put up 10k in BTC and get back 5k in USD (as a stablecoin). This only becomes a problem if the price
by aeternum 6y ago
Most sites are now requiring 2x collateral for a loan, IE put up 10k in BTC and get back 5k in USD (as a stablecoin). This only becomes a problem if the price up BTC rapidly drops 50%, which is possible and has happened in the past, but is also probably less likely due to increased institutional investments.
The risk may be worth the 8-10% interest.
- tcbawo 6y agoAfter a 10x rise in less than a year, a 50% decline is definitely not a remote risk. Anyone taking this style of loan should be prepared to face a margin call and avoid liquidating collateral at the bottom.