You have a false dillema there. There are more options than DeFi or a centralized entity. Firefish is on Bitcoin network, P2P, without a single centralized entity. You can make a home-baked loan with your family or friends (multisig). You can buy a future (that replicates the loan) - both centralized and decentralized. You are risking much less than you borrow in this case.
BTW: In case of tax in Germany, do you need to report the holdings? Because that would be a no-go for me, if I have to report btc holdings to a centralized entity.
Firefish whitepaper here: https://docs.firefish.io/firefish-protocol
No you don’t have to.
Anyway, putting your Bitcoin into Defi and sending it to a centralized entity is ok for you, but reporting it to a centralized entity is a no-go? Doesn’t make sense to me.
For me both is a no-go
(I understand that there are other options, I am still not convinced to take any risk on this asset for some upside. I don’t like the risk reward profile)
For me, putting bitcoin into defi (not a centralized entity) is much more ok than reporting it to a state.
KYC with reporting is a hard no for me.
