"Never sell your bitcoin!" they say
Also, no good lending products actually seem to exist?
Discussion
We are hopefully a year or two out from competitive lending products. Right now the interest rates are kinda nuts, but still probably worth it.
Tough to swallow ~14% APR AND counterparty risk. Best case scenario bitcoin far outperforms the APR and your lender doesn't go broke. Worst case scenario? Lender blows up and you lose all your collateral.
Yes lots of trade offs for certain, but if looking back if I had taken out loans rather than sell I'd be better off today.
Spending money (bitcoin) is fine
.... Yet.
I still think Zero Protocol from Sovryn looks interesting: https://sovryn.com/zero
But it does come with:
- Rootstock federation risk, the federation has you by the balls when you want to peg out
- Smart contract risk
- Liquidation risk, when your collateral falls too low or the overall collateral ratio falls too low
- Unknown risks
Bitcoin standard loans will never get low interest rates. They reflect real risks and costs of lending.
Fiat loans are so cheap because the fiat lender gets the lended money for free. No collateral can compete with that if you have to earn and part with real assets to make the loan.
Adjust your understanding and adjust your mental models accordingly.