3 ms·
You still need permission from the person/company on the other side to use crypto as collateral.
by philipwhiuk 4y ago
You still need permission from the person/company on the other side to use crypto as collateral.
- red-iron-pine 4y agoAnd there have been a lot of painful lessons lately as to why that's a bad idea.
- latchkey 4y agoMaybe I'm not explaining myself correctly. I can take crypto (and I'm talking about BTC/ETH, but can be others) and lend it out (generally for a positive APY). I can then borrow (typically USD*, but can be many other tokens) against that collateral (sometimes even for a positive APY!). No permission needed and happens in the scope of transactions that cost pennies. This is a massively important aspect of finance that goes beyond daily price swings. It is a relatively new aspect in crypto that has only been around for the last ~3 years or so. Example: https://aave.com/ https://aave.com/ ($8.2b locked up right now)