Re:Cryptocurrency in the 2020s
by jacobsenscott on Friday January 03, 2020 @08:25PM
(#21952089)
I'm not familiar with this product. How do you "close out" one of these loans? If you mean pay it off, nobody would take a loan they can just pay off at anytime, or where the interest rate can be just arbitrarily voted up.
> If you mean pay it off, nobody would take a loan they can just pay off at anytime, or where the interest rate can be just arbitrarily voted up.
It's true that the interest rate can be arbitrarily voted up. Despite this, 1.46% of all existing Ether (currently valued at $210,036,816) is staked as collateral in the system, so it's not accurate to say nobody would do this.
Re:Cryptocurrency in the 2020s
by vinniejames on Friday January 03, 2020 @09:01PM
(#21952243)
The loans are mostly used for leveraged trading or liquidity while maintaining a long position. Each loan is fully collateralized with the Ethereum token by the borrower
Raising the savings rate will also raise the interest rate that those holding loans must pay. If a loan holder doesn't agree with the new interest rate, they are free to close out their loan.