#理财 #借贷
Dry goods!!
I found that many people know nothing about borrowing and lending.
This kind of thing can actually be figured out just by trying it out yourself.
I'll explain a bit in a simple and easy-to-understand way.
Collateralizing coins to borrow USDT is essentially a hidden long position, while collateralizing USDT to borrow coins is essentially a hidden short position.
Let's use whole numbers as an example: a large cake is worth 10,000 USDT.
If you mortgage a large cake on a platform (some project's DApp, centralized or decentralized exchanges), you can usually borrow 70-80% or even less. That means you can borrow 7,000 to 8,000 USDT, which you can use for anything, such as circular lending arbitrage, etc.
But if the price of the large cake drops at this time, it will affect the USDT you borrowed (different platforms calculate it differently) because the value of the collateral decreases, and the original amount of USDT you received becomes unequal. Once it reaches a certain price, it will trigger liquidation, which is what you refer to as forced liquidation.
Of course, if the large cake's price rises, you only need to repay the amount of USDT you borrowed, for example, if you borrowed 8,000 you just need to return 8,000, but the interest is another matter. In the end, if the large cake returns to you at a higher price, isn't that essentially a hidden long position?
Now, for collateralizing USDT to borrow coins, just look at it in reverse: if the coin price rises, according to the algorithm, if the value is greater than the USDT you mortgaged, you will also be liquidated if you don't timely replenish your collateral.
The gameplay for borrowing coins is relatively simple; it's just betting against a coin, borrowing it ahead of time to sell, and then waiting for the price to drop to buy it back, and finally returning it. Isn’t that similar to contracts?
Another way is if the coins you borrowed have activities, such as short-term staking to earn coins. The more days you stake, the more coins you get; what you earn is the extra coins, which is one of the ways to arbitrage.
Of course, whether you borrow USDT or coins, you need to pay interest. I can't be sure if you will make a profit.
That's all for the basics of borrowing and lending.
