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18655460 No.18655460 [Reply] [Original] [archived.moe]

Ok how risky is this AAVE shit? how much Link do i need to dump there to make 800 Links more with low risk? If i put 3k Links as collateral thats like 11k$.LTV for Link is 65% so i have like 7k$ if i understand this correctly. That should leave some room for dumps if i only buy 800 Links then send that 800 back to collateral also for more protection and just wait for Link to raise in price? Where do you send that stablecoin for more Links? Coinbase? Any bros here willing to help a retard?

>> No.18655481

And which APR is the best? stable or variable if i use USDC? stable is 18.4% seems kinda high.

>> No.18655521

You should've done this when Iink was $2. It's too expensive to buy now. Send your stablecoin (USDC) to blockfi for 8.6% APR

>> No.18655580

Variable is better cuz it's lower
If you all link bank in there, you can calculate your risk with this formula:
X = 1.429*(1-1/L), where x is liquid price/current price and L is leverage. In your case leverage is 3800/3000~1.27, then x is 0.3 is and if you buy at price 3.8$ then liquidation price is 1.14$

>> No.18655599

2nd line should read- if you put bought extra link back in aave*

>> No.18655630
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Can someone explain this to me? So is this basically like some reverse jew loan that if LINK pumps I lose my money because of utilization value percentage (70%)?
So if LINK dumps after I loaned like 50% of more LINK then my health goes up right?
How the fuck do you pay it off if it dumps? I can’t visualize it. In my mind I only take a loan so that when my investment profits I cash out the difference. This seems to only work when LINK dumps afterward so your utilization value goes down but how do you repay what the FUCK

>> No.18655631

im confused, do you want 800 more LINK of exposure, or are you trying to profit 800 LINK? either way, lower LTV => lower liquidation, i recommend less than 2x leverage, i've felt fine sleeping with my liq under $1.50

>> No.18655654

when your collateral dumps it gets liquidated into the borrowed asset to pay off the debt, this happens for LINK when your LTV is 0.7

>> No.18655661

No. You borrow stablecoin with your Link and use that stablecoin to buy more Link. If Link goes up you can then pay your loan back.

>> No.18655681

if LINK pumps then your LTV goes down (debt is constant and collateral value increases, since you LINK is the collateral and it pumped) and your health factor increases

>> No.18655723
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So tell me, the logic here is to avoid liquidation by avoiding 0.7 LTV right?

So I put like 10,000 LINK as collateral, I loan 50% but we’d want to have stable coin (USDC) to prevent fluctuations upward (which will distort the 0.7 LTV dangerously) correct? So I have 10,000 LINK collateral and ~19300 USDC. I want LINK to dump so LV lowers so I can use the USDC to buy more LINK?
Buy more LINK with the USDC and add it to my collateral? Then repeat the cycle?

So how you pay off the loan is if the LINK price increases, loan less USDC so the 0.7 LTV doesn’t get hit and you get liquidated? Correct?

>> No.18655844

Ok so lets say i have 10k$ loan from there and my collateral Link pumps and it goes over that 10k$. What happens to the leftover $ when i pay the loan back?

>> No.18655847
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i don't really understand your question but i think you might be confusing longing and shorting, there is the procedure
>deposit LINK
>borrow USDC
>buy more LINK on preferred exchange
>deposit newly bought LINK on Aave
>LTV goes down and health factor goes up
>repeat the above until you reach desired leverage to a maximum of 2.857x
>LINKUSD goes up
>sell part of collateral to pay off debt
>keep the excess LINK
note that with each successive deposit your LTV will go down less

>deposit LINK
>borrow LINK
>sell LINK for USDC on preferred exchange
>deposit USDC
>borrow more LINK and repeat the above until you reach desired leverage
>LINKUSD goes down and your position is in profit
>buy cheap LINK on preferred exchange with USDC collateral
>keep the remaining USDC
you have the option of staying in fiat here or using the fiat profit to buy LINK, the whole point of this (for me at least) is to accumulate more LINK without directly risking my existing stack, so if i do open a short i would close the final trade by putting the fiat profits back into LINK

note that when longing if your LINK collateral dumps too hard then you will get liquidated at LTV of 0.7, if shorting then if your the LINK you borrowed increases in USD value too much then your USDC collateral won't be able to cover it and your USDC will be sold for LINK at LTV of 0.8

>> No.18655873

>gets hacked
>lose everything

>> No.18655875

waiting on you leet hacker man

>> No.18655891
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you sell enough LINK to pay back the USDC and keep the remaining LINK, which will be more than you started with because LINKUSD went up

>> No.18655893

Thanks really helpful anon!
How would one understand risk here? It seems that when buying a stable coin you would only need to worry about LINK fluctuations then. So it appears like there is little to no risk involved or perhaps I am deceiving myself.

>> No.18655966
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>It seems that when buying
im assuming you mean "borrowing"
>you would only need to worry about LINK fluctuations then
>So it appears like there is little to no risk involved
BTCUSD could do another 3-5k dump, in which case LINKUSD would probably follow by dumping at least $1.5 probably, who knows, absolutely do NOT overleverage, i honestly wouldn't feel safe right now with a liq above $1.20
>I am deceiving myself.
LINKUSD isn't the only risk parameter, it moves somewhat independently on its own and follows basic TA decently, but only when BTC isn't misbehaving, BTC is most certainly being fucky right now and has been since black thursday

>> No.18655985

Thank you for this explanation

>> No.18656063
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no probleme

>> No.18656662

enjoy losing your link collateral with the next price droo

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