I want to borrow usd for a maturity of about one year by showing the BTC and eth I have as collateral.
My purpose here is to meet my urgent need for usd. I do not want to sell these assets as I expect BTC and Eth prices will increase soon. I wanted to ask you because I have never done this kind of operation before.
1. Which platform would you recommend on Ethereum, Bitcoin or BSC chains? As of now I know Aave, Compound for Ethereum Chain and venus protocol for Bsc Chain.
2. Is there a time limit for such loans? Or is this limit all about size of collateral?
3. Do you have a borrowing/collateral ratio that you foresee to avoid nightmares?
Thanks in advance
I would stick with Aave. I know there are some newcomers, but haven’t looked into them.
There is no time limit and the debt apy is calculated according to the provided and borrowed Tokens ratio (you can see this on the details page of an asset). Your USDT credit balance will grow over time. But on the other side, your provided ETH, which will be wrapped as aWETH for Aave WETH, earns interest as well. You can even pay back the loan from your coleteral, if ETH price surges.
Since the fees on Ethereum mainnet are pretty high right now, I would suggest to bridge your assets first, do all aave operations on a l2 or sidechain, and then bridge USDT back and cash out.
The ratio to keep in mind is 1… If it drops below 1, your assets can be liquidated. I can sleep well with a ratio of 1.6 to 2, but that is totally up to your time horizont and risk tolerance.
Aave or Euler or compound. Everything is is unoriginal and a fork of one of those – literally