do people seriously convert BTC for centralized wrapped BTC to go yield farming some bitconnect.finance shittoken?
1) you lose ownership of your BTC by converting them to wrapped BTC, the only """decentralized""" idea of wrapping BTC, tBTC, failed within 48h
2) you probably lose ownership of your wrapped BTC when you stake it into some liquidity pool (depends on the smart contract)
3) you get rewarded in some bitconnect defi token (or YFI if you wish), which is valuable only because people staked wrapped BTC on it, it's literally credit/debit mechanism
4) you could lose all your BTC/USDT because:
-your wrapped BTC or wrapped USD contract is bugged, hacked, if your address get blacklisted, the contract are centralized so they can mint wrapper BTC that are not backed by real BTC and so on
-your staked wrapped BTC or USD are in a pool managed by a central authority, contract is bugged, hacked, if your address get blacklisted, the contract are centralized so they can mint wrapper BTC that are not backed by real BTC and so on (again)
-the value of bitconnect.defi comes from the fact that you staked wrapped BTC/USD for farming
NOW, LADIES AND GENTLEMENTS, WHAT HAPPENS IF EVERYBODY TRY TO SELL BITCONNECT.DEFI AND TRY TO GET BACK WRAPPED BTC/USD?
-they could be disappeared because of all reasons above
-bitconnect.defi value goes to zero, you are stuck with wrapped BTC/USD, but you also have to pay crazy fees to get them back
-whales don't care about crazy fees and they will FUCKING ANALLY RAPE YOU
if you are really doing this, you deserve to lose your entire networth, go fucking play roulette or videopoker...
ALERT
I put it all in BlockFi. If you are going to go centralized, you might as well go all the way.
I do not disagree with your general statement though. Its extra risk for extra profit. Some are willing to take that risk and others are not.
user, in normal world when the insane amount of derivatives go bust (they become unclaimable), there is the central bank pushing the interest rate below zero, giving free liquidity to banks to continue this scam and so on
but in crypto, nobody is going to bail you out (unless you increase the defi bubble), you are not a bank, your are going straight to zero, as soon as people starts panicking on next defi hack, you will see what kind of shitshow will happen, people will be trapped in the scam during the sell out and ETH fees will reach 1000$ if defi continue this way
if this happens, BTC can seriously go to 100K, imagine when people rush to convert back to check if their real BTC funds are actually claimable
nobody is shitting their pants?
seriously
wtf are you looking guys, only ROI and marketing?
it's gonna end up badly, really badly
Like I said, im just doing CeFi. I dont trust the defi contracts all that much either.
That being said they are usually backed by collateral, and if the price of the collateral drops beyond a certain level the contract can be liquidated to maintain stability.
Just don't stake everything into wBTCs? It is easy for whales to stake 50 BTCs because they have 10k of them. If you are to stake them then don't stake everything that you have.
this guy gets it.
wont invest into these scams. risk too high
It is the greatest game of musical chairs of all time
>there are Zig Forumsraelis that still cling to btc in 2020
Wrapped tokens are going to be a thing as they’re a transparent way of moving tokens across chains in order to interact with contracts on those chains. I foresee a future where the top coins will have multiple prices for each chain they’re on.