>Deposit LINK into AAVE or some other defi platform
>Deposit linkies and borrow DAI with LTV of .1666
>Use dai to buy more linkies
>liq price under one dollar, increase stack size by 1/6 for nothing
Is there a problem with this I'm not seeing? Sounds like free money
Welcome to what I'm doing lmao.
It seems like free money desu bro
or u can skip that step and go to binance where fund is safu?
It is. It's basically the same way that boomers get rich in property - get an asset that appreciates in value, when you have enough gains, leverage the gains without selling the underlying asset to buy more. So long as it keeps going up you're golden. Only risk is on days like today - don't overleverage so far that you get liquidated, I did that on MakerDAO. I thought it honestly wouldn't go below 100 again & paid the price. But then, everyone also knew this dump was coming. Maybe just deleverage before big events like this.
Sure, let's trust Chinks lmao.
Yes. I said 1/6 LTV in the OP but I think i may need to actually calculate a liq price. I really would be amazed to see LINK back under one dollar though.
So maybe 80¢. If it hit that price I might forget about crypto altogether for a while.
retard here, how do you "Borrow DAI"? I understand it literally just means borrowing a crypto currency but is this a feature of exchanges that I've missed? I've only ever used Binance and Coinbase.
don't you get liquidated if the price goes up too high too tho
Much for you to learn. What do you think gives the DAI stablecoin it’s value? Google something called “Makerdao”. Defi is fun
OP, how often or frequently can you do this? And is there a liquidation event if LINK price goes too high? Or only a lower bound?
this
anymore info on this? I really want to bump up my eth stack
Teach men sensei.
Lol what no there’s no upper bound on LINK price.
You use your LINK as collateral to borrow a DAI loan (pegged to USD, so basically a USD loan). Then you take that DAI and buy more memelink with it
So let’s say you have, for instance, 10k LINK. Open a debt position with it to borrow $5k DAI (USD). Then take that DAI and trade it for like 1k more LINK.
Boom, you now have 11k LINK.
look up AAVE or makerdao
don't do what op is doing without first understanding what's going on or you will lose money fast
but you have to pay back that loan, whats the time frame on that?
Depends on the terms of the loan. With DAI it’s basically indefinite I think
does this involve me giving custody of the 10k LINK to the lender?
Sergay betrayed us all and link is a scam
Unfortunately on AAVE at least you must deposit your funds into some smart contract. That’s my only real hang up
I know some of the basics, i'd just like a guide or something to watch
>deposit coin
>borrow stablecoin against it (being careful not to overleverage)
>deposit the coin you bought
>sell it when it gets high enough to pay back the loan and the rest is in your stack
So you still have to return the DAI with interest. So key is to take the loan, buy a LINK dip, or wait for higher price, then return the DAI and keep the difference?
Otherwise I guess if LINK is appreciating faster than your debt then it's worth holding.
Yeah you have to repay with interest. I’m just bullish af on link so I don’t plan on returning my DAI loan until link is at least $20 so I will only have to sell a small percentage of the LINK I acquired
>link is 20
lol
I would advise anyone to think twice before leveraging even at 1.1x
Remember not too long ago link hit 0.01 usdt on binance
I got liquidated with 5k link at 1.2x
Remember folks, the «I would be surprised if x happens» actually happens alot more than you think
DCA with money you can lose beats every strategy
God bless yall
That’s another great point. I’ll look into the price oracle that aave uses.
Aave uses chainlink price feeds, so not sure how this would happen on aave
so...anyone have any guides? or youtube people that do this for adding to their stack?
But the chainlink price actually hit 0.01 usdt on binance, this was not an oracle problem.
Wouldn't that outlier value just get thrown out or ignored? Are you sure the the chainlink price was 0.01 or just the binance price?
aave has flash loans though, you can flash loan in the event of a black swan like that and when it rebounds you owe nothing. flash loans prevented people from being liquidated
My bad, you meant the LINK price on Binance. I'm saying that the final, aggregated price, that Chainlink Oracles deliver to Aave should not be affected by wild outliers like that.
Am I missing something?
it would get aggregated. It was a specific price pair on a specific exchange.
But owe 5k?
So does AAVE aggregate?
And even then, could flash dumps like this happen across multiple exchange pair listings and even multiple exchanges? Is this unprecedented? I don’t mean up Bart down Bart. I mean dump to, say, 10¢ for just one trade on multiple exchanges
Yes. But if the link you borrowed was $20, you would have made 750 link total out of basically nothing.