Imagine this: You've been holding onto your hard-earned Bitcoin or Ethereum, watching its value grow over time. Now, with THORChain's latest feature, you can make your crypto work even harder for you. Welcome to the world of THORChain lending utilized over THORSwap, where you can leverage your BTC or ETH to secure a loan. But what exactly does this mean for the layman?
In a nutshell, THORChain's lending system is overcollateralized, ensuring that you receive (only) 50% of the capital you lock into the lending contract. For instance, if you decide to deposit 5 ETH into the contract, you'll receive for example 2,352.35 USDC in return (other cryptos are also possible) – that's half the value of your ETH at the time you open the loan. This loan comes with a cost, in this case, $15.41, and has a minimum term of 30 days. That means you can only pay back the loan after this initial period, but there's no maximum time limit; you can keep it open for as long as you want. It's important to note that only the wallet address that initiated the loan is eligible to repay it. The amount to be repaid remains fixed in USDC, regardless of how much ETH may be worth when you settle the loan.
But why would someone want to take out a loan worth 50% of their crypto's value? Well, here's where it gets interesting. With USDC on THORChain, you can participate in the platform's earn section. By depositing your USDC into THORChain's Savers Vaults, you can earn a generous 15.1% Annual Percentage Rate (APR) on your stablecoins (at the moment of writing). This essentially allows you to do two things at once – stay invested in your ETH while earning 15% on the stablecoin required to repay your loan. It's like having your cake and eating it too.
Of course, like any financial opportunity, there are risks involved. THORChain is the third party here, and although its decentralized nature makes it resilient, it's not entirely risk-free. However, it's worth noting that THORChain has a robust history of security, and its contracts are battle-tested. While there's no such thing as a completely risk-free endeavor, THORChain's lending feature presents a unique opportunity to maximize your crypto assets and unlock a new level of financial freedom. It's definitely worth considering for those looking to make the most of their crypto holdings.
This is @no-advice
NO INVESTMENT ADVICE. The Content is for informational purposes only. i am invested in THORChain and hold $RUNE, $TGT and $THOR
References:
https://medium.com/thorchain/lending-on-thorchain-646bbf2e6e1b
https://app.thorswap.finance/lending
https://app.thorswap.finance/earn
Posted Using InLeo Alpha
