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Collateralized Loans on Polycub
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@shortsegments
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Collateralized Loans
- A simple or small idea with big potential.
- Collateralized loans allow you to borrow funds against assets held in a Bank, or in the case of Polycub, a DeFi project.
- I am excited to describe for you an opportunity coming soon to PolyCub, a decentralized project on Polygon, created by the Leofinance community development team. Leofinance is a four year old community here on Hive.
- This opportunity in brief would you require you to deposit Polycub in the XPolyCub vault, and then you would be allowed to borrow a certain amount of Polycub back from this vault, which you could use to buy other cryptocurrency tokens, such as Leo, Hive, Bitcoin or Ethereum.
- This loan would allow you the opportunity to invest in both Polycub and something else. A great way to own two things with the same money.
- ‘Now this is risky, as the loan is dependent on the Polycub maintaining it’s value above a certain price. Other wise your Polycub would be sold to payback what you borrowed.
- ‘However I welcome the prospect of Collateralized loans on Polycub, and I would take advantage of them to buy additional assets to hold.
- ‘However I also wish to support another idea circulating within the Leofinance Community: Collateralized Loans unsing HBD. HBD or Hive Backed Dollar, is the Hive blockchain stablecoin backed by a dollars worth of Hive.
Stablecoin Collateralized loans
- This means the collateral for such loans is a stablecoin like HBD the Hive Backed Dollar, or USDC, DAI or BUSD.
- I have been using stablecoin collateral loans for months on Venus.io a cryptocurrency bank on Binance Smart Chain, where I deposit BUSD, and borrow Vai the Venus bank stablecoin, and use it to buy tokens on PanCakeSwap.
- Then I invest those tokens on Cubfinance or Polycub.
- None of my loans have been liquidated because my BUSD has maintained its value.
- It is for this reason that I am in favor of stablecoin loans.
- I realize that thanks to Terraluna and the collapse of their stablecoin UST, people are not very trusting of Stablecoins these days.
- But I think that is like throwing out the entire barrel of apples because of a few rotten ones.
- I think this type of Collateralized loan is the best one for a bear market, and in some respects any market.
- While it does allow the degree of leverage a volatile token like Bitcoin would allow, it is safer, and it promotes the preservation of investment capitol, which should be a major goal in any market.
What do you think?
@shortsegments
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Posted Using LeoFinance Beta