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These defi lending platforms generally require you to overcollaterlize your loan because they can't sue you or send you to collections or whatever. You could de
by anonymoushn 5y ago
These defi lending platforms generally require you to overcollaterlize your loan because they can't sue you or send you to collections or whatever. You could deposit a bunch of USDC, withdraw a bunch of USDT, send that to coinbase or whatever and sell it for real dollars, but you'll have slightly fewer dollars than you started with.
- paulgb 5y agoThe USDC is not frozen as collateral? The way I understand it, I could borrow $10 USDT collateralized by (say) $11 of USDC, but then I couldn't convert that $11 of USDC to $11 USD until I bought back the $10 USDT and returned the loan.
- anonymoushn 5y agoThat's correct. I'm just saying you could sell the 10 tether for dollars and put those in your bank account while you wait for the tether collapse.
- paulgb 5y agoAhh, I see what you mean. That way if USDC collapses, I would lose just the amount it was over-collateralized by. If USDT completely collapses but USDC does not, I would gain the amount I was short USDT. This is more interesting. Thanks for explaining it.