If you aren't leveraging your LINK, What are you doing?

Most of us linkies will be holding until 1000, so you're losing out on major profits if you dont leverage (at least until staking comes out):

A: Currently you can barrow link at a 0.06% APR at AAVE, meaning you can long link for basically no cost to you. The current loan to value ratio is at 65%, meaning you can hold up to 65% more LINK for free.

B: If you also believe in ETH2.0, you can loan your link, get 32 ETH, and stake that when ETH2.0 comes out.
Before staking comes out, you can:
1: Put the ETH into MakerDAO
2: Long ETH using the boost contract on DefiSaver, or you can

2.1: take out a DAI loan (which at this moment, there is no fee due to yield farming)
3: put that back into AAVE, making 7% APY
4: total profit: 7.07-3.01% = 4.06% APY

This causes a snowball effect; people locking up their LINK to go long, which will lock up more LINK into smart contracts, causing the supply to go down, increasing the price.

Of course you could swing trade your LINK, but you've seen all the threads of Linkers on suicide watch. Leveraging ultimately gives lower but way safer returns.

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Based on what you utter cretin. This project is dead and it's affecting my mental health because of fuckers like you. The thing is you have no shame and don't believe in karmic wisdom because you'd know the problems you cause people who are not born into money and just trying to make it. At the end of the day I ain't looking for a Lambo I just want to have a small flat in this overpriced shithole that is the uk - not keep sucking my landlords dick. But no, you give us hope that this coin is worth more, so we buy using our shit £33600 a year salaries to try and make some money.

Well fuck you mate and fuck all the cunts that shilled this utter crap. I've had enough!

Based. Sold all links.

what

thanks just lost 100k in a hack

Link has zero yield on AAVE because everyone is depositing it to chase lowcaps that are not on exchanges yet and nobody is crazy to want to borrow it and have debt denominated in linkies. Using Link on AAVE to borrow anything that is already available on exchanges (like Link itself or ETH) is stupid because you will be at a disadvantage as far as fees/gas/interest is concerned. If you want to margin trade, just do it the normal way.

Advice from someone who says

>barrow

yeah..

Someone told me earlier not to do this. Just to buy a bulllink coin on ftx. I tried reading wtf the bulltoken is and still don't get it lol.

That's terrible. FTX tokens take a small administration fee cut out of the token's value every day. This adds up to like 20% of your money in a year. Better just set a 3x position there manually yourself.

Lol, fuck off shitcoin shillbot. And never again give such advice, some if my lower iq frens might fall for your shit about buying hyped shitcoins on leverage. You can keep your bags, no one wants them.

Yeah besides if you borrow LINK... you have to pay back in LINK. Good idea in principle but you’re practicing it wrong.

You have to borrow a stablecoin or something you think won’t accrue value while LINK does.

I’d know I borrowed like 25,000 BAT and turned it into shitcoins and more LINK.

yes, DO NOT BORROW LINK, you have to pay back in LINK as it grows in value. Borrow stable coins against your link.

You people will be so far beyond rekt it is not even funny..... once enough people get suckered into loans they'll pull the plug and you'll be underwater. Currently 8 mill link on AAVE-- if we get another black tuesday Eth grinds to a halt, you'll franctially try to exit your blanancer pool or comp farming position, but gas prices will be 1000 gwei and take hours. You'll watch helplessly as you get liquidated and some smartfag takes your position for pennies.

This is coming, and you best be prepared for it.

Deposit (long) Eth
Borrow (short) USDC
Buy whatever you want (long)
As long as your making more thne 7% a year on your coin your in the clear.

What is a good collataralization ratio in your opinion?

good thing you dont leverage your link you munster retard.

Just don't be stupid and go borrowing the maximum amount (65%) as suggested, keep your health factor above 4-5 and you'll be fine even in the event of a crash. The bigger risk is if there is a critical vulnerability in AAVE but there is 250K bug bounty which has been going on for a while, consensys diligence audit and open zeppelin audit, so they're clearly being extra careful

Don't forget to buy rope during your next run to the market.

none after a parabolic move. even if you're good at managing debt you can still get smoked by a 50% move--and when those happen, Eth basically stops. I've been through 3 of them holding link already.

Any CDP is effectively a leveraged position. Maybe read the title of this thread again.

Go with BAT as your collateral, unless BAT makes some kind of parabolic run by itself completely against the market it will dip when everything else does too - a stablecoin won’t.

It is a gamble, BAT could shoot to 50 cents overnight but that seems unlikely in the near future.

As your borrowed asset I mean.

It could work but you can get rekt if the market decides to go bull and BAT pumps. Safer to just borrow a stable coin

I don't understand why you'd borrow anything but a stable coin, what am I missing?

Just add more collateral if you feel unsure of yourself. Do you really think the market is going to pump without LINK?

You could borrow a token if you think it will dump. Imagine you borrow 10K worth of BAT, convert to USDC, meanwhile BAT dumps to 0$. You can repay the BAT loan for free, it's basically shorting the asset (but you get rekt if it goes up)

user, can you explain what happens in this situation?

Let's say BAT saw a bull run like LINK just did, what happens to everyone using it as collateral? Does it further push the price of BAT up? Does it destroy the worth of the AAVE token? Does it just liquidate people and the market is agnostic?

Even if LINK pumped with BAT, you would end up having to pay more in USD terms. If BAT does a 10x and LINK does a 10x, great you're not liquidated, but now your 10K loan is worth 100K.

I guess that makes sense, seems highly risky

Your loan gets called by the smart contract plus 10%

If you had traded BAT for more LINK you’re really just out that 10%.

Thanks user.
Does any of this affect the price of the token you used as collateral?

Your collateral value increases if your token/coin increases it’s not price locked.

You have a health value indicator on your loan(s).