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A comment on Ask HN: Do you think this is the start of the new financial crisis?. Parent comment

Re:Ask HN: Do you think this is the start of the new financi... by latchkey on Tuesday March 21, 2023 @10:49AM (#35246988)
HN can't think past price goes up/down and see that a lot of crypto is a valuable resource that you can use as collateral and borrow against it without having to go to a bank and beg for permission.
[ Parent | on HN ]
Re:Ask HN: Do you think this is the start of the new financi... by philipwhiuk on Tuesday March 21, 2023 @11:10AM (#35247334)
You still need permission from the person/company on the other side to use crypto as collateral.
[ Parent | on HN ]
Re:Ask HN: Do you think this is the start of the new financi... by latchkey on Tuesday March 21, 2023 @11:35AM (#35247700)
Maybe 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/ ($8.2b locked up right now)

[ Parent | on HN ]
Re:Ask HN: Do you think this is the start of the new financi... by red-iron-pine on Tuesday March 21, 2023 @11:18AM (#35247467)
And there have been a lot of painful lessons lately as to why that's a bad idea.
[ Parent | on HN ]