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Let me dryly discuss this because I feel people are being too gut reaction here There is a "real world use case" that most would agree with, just cynical. Borr
by ludamad 5y ago
Let me dryly discuss this because I feel people are being too gut reaction here
There is a "real world use case" that most would agree with, just cynical. Borrowing and lending crypto is not a taxable event. You can have a capital gain on the blockchain and borrow stablecoins against it, indefinitely delaying taxation. At the same time, as of this moment you can wash trade crypto and tax harvest any new bottoms, making this tax favorable (a common assumption here is that crypto is an expected value 0 gambling game).
Example in the wild https://twitter.com/mcuban/status/1465002539603185668 https://twitter.com/mcuban/status/1465002539603185668
In this way, it resembles high finance trades e.g. that Matt Levine of Money Stuff used to do to lower client taxes
- shoto_io 5y agoYes, thanks. I actually saw this tweet. I think he has a point. Has he not? I know people who get a loan on their stock portfolio. For that they need to apply for the loan at their bank. This takes time and could be denied. But, if you get it you have a nice lever to play with (basically re-invest in stocks). The principle is exactly the same with DeFi, isn't it?
- ludamad 5y agoIf there was a regulated issuer of S&P500 indexed coins then indeed these platforms would provide normal margin investing. If crypto lives a lot of stuff will go away and hopefully a lot of tokenized promised governed by laws will enter (because that is the only smart contract to real contract bridge). But I doubt the lending platforms would budge.