Hackernoon logoTurning Income Into Collateralized Crypto Loans - Hodl! by@jare

Turning Income Into Collateralized Crypto Loans - Hodl!

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@jareJarett Dunn

https://hacks.substack.com Accelerating by Design, Dropout Now Entrepreneur, Mental Health Advocate!

Tomorrow, I'm getting $1313 CAD refund as a present from Newegg for their defunctional laptop they'd sent me. I'm going to etransfer it to canadianbitcoins.com in exchange for ETH at around 5% loss on the dollar.

I'm going to send it to a wallet that I connect to compound.finance and then borrow what I need back in DAI or USDC - about $134 CAD for cigarettes and $325 CAD to pay back a laptop debt.

I'll be exposed to 11-15.5% APR from borrowing stablecoins, but since I'm long ETH I believe it will grow more than that in a given year - year over year - allowing me to borrow more, should I wish. Also, since my loan will be over-collateralized - as I'm not borrowing the full 75% I'm allotted when borrowing ETH - ETHUSD can go down a significant amount before I'm risking liquidation, which I can fix by collaterlizing more crypto in the future.

Their collateralization factor for wrapped BTC at present, however, is 0% - but in a near update to the protocol this will reflect WBTC liquidity, and be some value between 0 and 75% - which I plan on capitalizing on by holding WBTC and then borrowing against it.

Voila! I'm now long BTC and long ETH.

As I'm in the process of negotiating my first multi-client exchange volume faking bot subscriptions, which will not only produce enough income for me to comfortably be labor-free but also make a fortune out of my favorite passtime and hobby, it's critical to find a way to both hodl crypto for the long haul while still paying for the necessities of life. Given that I can borrow up to 75% of my hodlings at a given point in time, I can now accumulate crypto wealth - even being able to borrow again should incomes drop against it so long as BTC/ETH grow more than the %APR it costs to borrow - and I won't be left in situations like in the past.

When I was first switching my $USD payroll to bitwage.com in 2013/2014/2015 I was earning 3-5 Bitcoin - @$200, $300, $500 apiece - each and every week for consecutive months. Opportunity cost of spending all that at current values - even while truly believing in BTC's value proposition, just having expensive habits like rent and tobacco in Canada - pales in comparison to having 850 Ether I cloud-mined and sold @ $5, $6 apiece maybe 9-11 months before ETH's ATH.

People have been known to lose their minds or lives over far, far less.

What the remaining people can do is learn from this experience - be long crypto or at least long BTC and ETH while still being able to spend most of your income on the necessities of life.

Long live #DeFi!

Ps I wonder if the folks at Compound saw this:

Combination of Borrowing Facilities via Smart Contract on
Compound.Finance and Pooling of Funds for Traders on Uniswap.exchange

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