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You can post collateral, borrow coins, convert to Fiat and spend the borrowed money on what you like. Sounds like a (collateralised) loan to me? As a peer com
by benjaminwootton 4y ago
You can post collateral, borrow coins, convert to Fiat and spend the borrowed money on what you like. Sounds like a (collateralised) loan to me?
As a peer comment says, collaterlised lending is very popular in traditional finance to avoid taxable events and gain leverage.
There are plenty of critiques around Crypto but this isn’t one of them.
- ogogmad 4y ago> avoid taxable events and gain leverage This is a highly specialised use-case unlike a normal loan. And the collateral for this is as difficult to obtain as the cash you'd like to borrow in the first place. [EDIT: More difficult because the "loan" is over-collateralised!] > There are plenty of critiques around Crypto but this isn’t one of them. No. It's a perfectly good critique of how DeFi people abuse the word "loan".