Non-custodial BTC lending isn’t just about accessing liquidity.
Every bitcoin locked in escrow =
• not sold
• not rehypothecated
• not sitting on an exchange
Non-custodial lending is a supply shock machine hiding in plain sight.
Discussion
Sounds great, but most of the offers deal in crypto that you still have to sell on an exchange. Why would I want L-BTC, tether or worse? Am I missing something?
Exchanging stables for fiat doesn't create a sell pressure on BTC.
There are few reasons why borrowers choose to borrow with Debifi:
1) Have liquidity without losing the upside potential of bitcoin price.
2) Depending on the jurisdiction some people don't need to pay capital gain tax when taking a loan against their btc.
3) Some users want to use the loan to buy more bitcoin.
4) Better rates if the credit score is bad.
5) Unbanked population can get access to loans.
Thank you for the reply.
I understand the benefits. I understand not selling your btc. On paper it sounds great, and I really like the debifi model.
But getting shitcoins in return are less liquid than btc or cash. For example, if I want to use a loan to invest equipment in my business, I don't know of anyone in the real world wanting usdt, eth, or liquid(which is a pretty ironic name). At that point btc is actually more desirable or workable.
And as far as I can tell, if you want to take on shitcoins you have to go through another exchange. Which reintroduces kyc and potentially a tax liability. Am I wrong? I'm sincerely asking. If I didn't care, I'd go with strike or coinbase and have to turn over my keys to questionable actors with questionable motives and give up privacy.
I also realize that we are still early and these are growing pains. But this seems like a fear problem to solve.