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It's just a smart contact vault, you can put collateral, take it out whenever you want, you just need to make sure that at any given point in time you have at l
by rawtxapp 6y ago
It's just a smart contact vault, you can put collateral, take it out whenever you want, you just need to make sure that at any given point in time you have at least 150% of your debts value in collateral in the vault. This person is at over 400%, so very conservative borrowing, can withdraw some collateral.
There are also centralized versions with blockfi if you prefer traditional loans.
- nly 6y ago150% collateral (66.7% LTV) seems fairly risky for an asset like Bitcoin tbh
- rawtxapp 6y agoIt handled the black swan event of complete market crash at the beginning of the pandemic pretty easily. And the other thing is Bitcoin's market cap is well over 1T$ now, as expected the volatility goes down as the market cap goes up. I suspect those ratios are going to come down significantly within couple of years.
- pushrax 6y agoI read a bit online after this, and saw various recommendations for people with CDPs to keep more like 300% collateral. If it dips below 150% the contract is automatically liquidated. Should give ample time for the creditor to get their money back.