/biz/ - Business & Finance

>>18511303
idk but it gets the stacks going

>>18511332
I have 20k link and someone said I could borrow up to 46000, I wanna know what I'm getting into though

>>18511397
Anon, only borrow enough stablecoin to buy 10k link. That way you won't get liquidated unless link goes under $1. Then you don't need to stress over it and you can enjoy the massive (extra) gains in the longrun

QRD:
>go to aave
>connect your wallet and deposit a stack
>borrow stablecoin like usdc
>buy link with stablecoin
>redeposit link you bought as collateral
>rinse, repeat if you want to get more leveraged

>>18511440
>>18511453
Ok but how do you get your link back if you can’t sell any to pay off the loan?

>>18511507
;)

>>18511453
How is this better than margin trading?

>>18511507
>LINK goes up 50% in value
>Sell the excess gains to get stablecoin and repay loan
>Take out collateral plus all the extra linkies you gained

>>18511453
When you borrow is that not a loan? That's the part I'm confused about, if i borrow 10k link that's $34,600 atm, so I have to pay that back by a certain point? Having 30k definitely sounds nice and I would agree I don't think we're going sub $1 unless it's another scam wick

>>18511536
>How is this better than margin trading?
There is no expiration. I'm not paying that loan off until the next bull run. And with aave, I can wait for that and more

>>18511572
How much would I have to deposit to borrow 10k?

>>18511552
You're borrowing money to buy link at a low price, link goes up, you suddenly can pay off loan plus you have a bunch of extra link. You wouldn't do this if you don't think link is going up

>>18511572
what if stani kulchov pulls the greatest heist in history and Russian scams all of you out of millions of linkies?

>>18511594
Depends how leveraged you want to get. Theoretically you could deposit maybe 5k link to borrow enough stablecoin to buy 10k, but I would not recommend it. I try to only borrow like 35% of my collateral

>>18511602
It's going to 7+ next month so yes I believe it's going up

>>18511607
Aave doesn't hold the coins, they're in an open source smart contract that you can verify for yourselves

>>18511542
Ah so I can sell the link to aave while it’s collateral?

>>18511622
What about 10k low leverage?

>>18511672
no you withdraw enough LINK to pay down your debt when your long is in profit and sell it somewhere, once the debt is paid down you can withdraw the rest of your deposit, either to keep as LINK or liquidate to fiat

>>18511674
it's more about what liq price you are willing to tolerate, liq price = (debt/0.7)/LINK collateral

>borrow money
>dont pay it back
based

>>18511716
which price feeds does Aave get its link price from?

>>18511701
So if I deposited 10k @ $3, they would let me withdraw 5k @ $6 to pay back the entire loan?

>>18511747
Chainlink
>>18511674
I'd personally feel best around 15k deposit for that, but I'm pretty conservative (for a borrower)
>>18511672
You have to sell the link on an exchange, but you can withdraw parts of your deposit as you like. The idea is that link has gone way up, thus you need less of your deposit anyway, so withdraw, get stable, and pay back

>>18511769
>So if I deposited 10k @ $3, they would let me withdraw 5k @ $6 to pay back the entire loan?
Yes, exactly right. Plus interest

>>18511716
So if I put up my entire stack 20k to borrow 10k link (34,700 USD) my liquidation price is $2.47?

>>18511816
yes

>>18511794
>>18511798
Makes sense, thx for the help!

>>18511747
chainlink and proprietary, defense in depth

>>18511823
This guy >>18511816 said I could get my liquidation price under $1

>>18511303
Don't touch this shit. Suterusu staking is the way to go until summer desu.

>>18511816
Do you lose it all at once or does your funds cover the loss as it goes down until you have no more?

>>18511823
Oops wrong person, this guy >>18511798

>>18511877
>>18511861
against 20k LINK deposit a $14000 loan would put your liq at $1

>>18511823
>>18511816
Not quite, because you then deposit the 10k link back on aave thus increasing deposit by 10k*2.47 which would bring it way down again

I think it would be 34,000 * .7 / (34,700 + 34,700*.5) = 1.6

Am I wrong?

>>18511938
by deposit i meant total collateral, assuming >>18511877 had already reached his desired leverage

>>18511303
>You get money/object
>After set period of time it gets taken back, albiet with a bonus for the person who owns said item (Interest)

This seems too good to be true, and if I want to double my 10k stack I’m risking it being hacked by the exchange or some BS system crashes down and everything is gone. Where’s the catch here?

>>18511963
>(debt/0.7)
Okay, why did you divide? I'm super high here and have gone into total brainlet mode

What’s the formula to calculate liquidation price?

>>18511303
Also if there’s no deadline to pay back? (What the anons imply here) then can’t I technically use the LINK I have as collateral to withdraw twice my stack as a loan and run without paying?

>>18512011
It most likely is right now. All of these smart contracts like maker function the same. Ways for people to use leverage. But with huge candles and bad coding a lot of people lost their eth on maker. This will likely be similar. So many anons losing their linkies due to greed. Greed kills stacks, no different than swing linkers.

>>18511816
>>18511823
Btw I see why I was getting confused. I thought he meant $10,000 in link, which I is what I meant when I said sub-$1

with a maximum LTV of 0.65 the geometric series converges to (_deposit/(0.35)) = 2.857*(_deposit), that's using 100% of your borrowing power though, as Aave calls it, so if you continually leverage all the way up to 2.857x then your liquidation (assuming a constant price of 3.47 USD per LINK) on 20k LINK would be at $3.22 or thereabouts, not sure how Aave rounds for liquidations, of course if your levered below 2.857 then your liq price will be wider of your entry: less leverage = less risk of liquidation

>>18512017
collateral begins liquidation when debt = collateral*0.7, or equivalently when collateral = debt/0.7, that is, when your loan is 70% of your collateral value

>>18512075
liq = (debt/0.7)/(total LINK collateral), debt is denominated in USD and total LINK collateral is your LINK deposit after reaching desired leverage

>>18512151
Thanks anon

>>18512083
there are withdrawal limits, meaning you can't withdraw more LINK than would leave you undercollateralized against your debt, that's how defi loans work, they are secured by assets in smart contract escrow to be liquidated if certain conditions are met (collateralization ratio meets or exceeds 0.7 in the case of loans against LINK)

>>18512177
What’s going to prevent me from being liquidated by a flash crash?

>>18512177
Can you borrow more than what the collateral of your stack is worth?

>>18512202
Chainlink price feed

>>18512254
Explain? If another crash happens and LINK stays at 1.50 for an hour I’m sure a lot of anons here with their Aave loans will neck

>>18512202
well this stuff is gambling anon, don't take on more risk than your are willing to tolerate, deposit more collateral if you're afraid your current liq is going to get hit by a flash crash, for example black thursday took us to something like $1.4, deposit enough collateral/don't borrow more than would take your liq above $1.4, don't take on more risk than you're willing to stomach

>>18512204
>Can you borrow more than what the collateral of your stack is worth?
if you mean your original deposit then yes, up to 2.857x assuming the price of LINKUSD price stays roughly constant thoughout your levering, i imagine you could write a bot that did this pretty quickly minimizing LINKUSD movements, that being said you'd have to do it on dexes and if you're borrowing any significant amount (thousands of USDC) then you're going to get fucked by slippage on Uniswap for example, even if you use a liquidity aggregator like kyber, 1inch, or paraswap it seems slippage is unavoidable, you have to use a centralized exchange, but they don't release funds until after like 30 confirmations, therefore levering up to 2.857x takes time and the LINKUSD price might move or you suffer high slippage through dexes

if you however meant can you borrow more than your total collateral value then no, that's what the liq ratio of 0.7 means, your debt cannot meet or exceed 0.7 of your collateral's USD value or else you start getting liquidated

>>18512324
There are anons here talking about their liq price being 1.4 or some shit despite having almost x2 of their total stack as leverage. Isn’t this basically free x2 LINK? It’s like a long contract with no expiry, and a liq price that’s ridiculously low. I’m still suspicious of this being a scam. It doesn’t make sense why they’d make the liquidation price as such with that kind of leverage

>>18512423
I have two times my stack at a low liq price because the price of link went way up, like 50%, and the dollar value that I borrowed stayed the same.

>>18512477
To clear you couldn't start that way. I took on a higher ltv ratio and had a higher liq when I took it out

>>18512423
>There are anons here talking about their liq price being 1.4 or some shit despite having almost x2 of their total stack as leverage
nah 2x at current price puts your liq at $2.45, they would have to have bought at $1.96, which is possible, anons could have a low liq on high leverage because they bought low, and now they are enormously in profit and far away from the liq of their position open

>>18512324
That fat fuck kek

>>18512501
Given that liquidation price, would you still go all in x2 leverage? I can’t see LINK going down below 2 ever again in a long time.

>>18512588
yea but that's only your liq if you longed at $1.96, longing right now puts your liq at $2.43, if you're willing to tolerate a 97 cent drop from here then go for it, you could also hedge with an equivalent short

>>18512625
Interesting. In another thread the anon talked about an additional 10% to pay if you are liquidated.
So if I longed at 1.97 and now it’s at this price (3.5) I can continue to keep this x2 LINK amount indefinitely? If I remember right there is APR every 30 days, so just sell a little of the x2 I borrowed or decide to be free and cash it all out?
After math, how much would you be pocketing in profit if you started with a 1k stack given these variables?

>>18512711
>In another thread the anon talked about an additional 10% to pay if you are liquidated.
yes, don't get liq'd
>So if I longed at 1.97 and now it’s at this price (3.5) I can continue to keep this x2 LINK amount indefinitely?
sure, but the whole point of this is to accumulate more LINK, why not take some profit?
>If I remember right there is APR every 30 days
it accumulates every second actually
>so just sell a little of the x2 I borrowed or decide to be free and cash it all out?
entirely up to you and your trading system
>After math, how much would you be pocketing in profit if you started with a 1k stack given these variables?
long 2x at $1.97 with initial deposit of 1k LINK lets you ride an additional 1k LINK up to $3.5 that you purchased for 1.97*1000 = $1970 on credit, at $3.5, $1970 + $4.93 (interest after a one month position) is worth 564.26 LINK, so you get to keep 435.74 LINK of the original 1000 that you borrowed, once the debt is paid down you withdraw 1435.74 LINK and ur done

>>18512859
Thank you based anon I’m going to try this now

>>18512888
checked

>>18512910
I have a question though, sorry for being a lazy shit not reading the whitepaper (I will before I put my LINKies, promise), but how do they circulate the tokens? and is there insurance or a safety net somewhere? How do they profit?

>>18512972
Additionally, wouldn't this add to the volatility of the LINK market? If some big dick anon with 100k LINK decides to put x2 leverage and continues to either buy/sell his LINK it would I assume, drive the price up or down in large swings wouldn't it?

>>18512972
350 open market, 300 reserved for market dumping (to fund future development) presumably through iceberg orders, which may or may not have happened with the 700k moves, we still don't know for sure what happened with those except that they ended up on binance, closest thing we have to confirmation is this line from this blog https://blog.chain.link/growing-chainlink/
>We do sincerely appreciate our community’s continued support and understanding as we expand the number of people working on Chainlink, and we will of course do our best to ensure that our expansion plans are accomplished responsibly, carefully managing the company's resources, capital and LINK, with a focus on continuing to create an overall positive effect on the Chainlink network over the long-term.
and finally, 350 for node incentives, this one is the least clear but it seems to mean 2 things: chainlink is paying nodes with LINK until the network is more mature, LINK will be distributed to nodes to be used as stake so they don't have to buy it on the open market, so it's another way to incentivize nodes to join the network, some think this is bearish but i do not, choose for yourself

>>18513041
Additionally, wouldn't this add to the volatility of the LINK market?
not in the downward direction, since there is more and more LINK being deposited to long more and more LINK to accumulate (and keep out of circulation) more LINK then sell pressure decreases, buy books will be thick and sell books thin, only volatility will be up, i mean people could be borrowing LINK rather than depositing it but that is very very far off the current prevailing trend (borrow rate for LINK is 0.28% for fuck sake, no one is borrowing/shorting LINK)

>>18512972
pic related is from the ico