Do You Think Crypto Self Repaying Loan Will Ever Be A Reality?
I heard about the self repaying loan last year and it sounded like one of the best ideas I have ever heard before in my financial life especially with crypto. First of all, when you decide to invest in crypto, you have two options, you can either hold it your wallet, it becomes inactive without making any passive income for you, or you can invest it to make passive income for you. What are the ways we can invest our crypto holdings, you can lend it out, you can stake it to earn some interest or you can use it to provide liquidity and earn rewards for that. Depending on what choice you choose, but then each choice has their own rewards and risks.
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But then looking at the self repaying loan angle, it seems like something that is too good to be true, as humans we always need money for one reason or the other, but then, we have some crypto assets sitting in our wallets without giving us any passive income. Imagine holding $2k worth of ethereum and you need urgent $200 to sort out something, but you don’t want to sell some of your ETH for it, what do you? Instead of selling your $2k worth of ETH or take $200 from it, the best thing you could do is borrow $200 from a self repaying loan platform, then use your $2,000 worth of ETH as collateral. This way your collateral helps you generate interest to pay your loan, when its due, you get your ETH back. But what might be the catch? How does the platform doing this make profit?
I feel like if this is expected to be a reality, then we should expect some terms and conditions coming with it, for instance, if you are taking $200 loan, you can pay a 10% fee of what you are borrowing, this way the platform benefits for providing you with the service. This will help provide sustainability of the project, because one way or the other, liquidity will get provided to help keep the project going. So it can work out fine, we have seen a lot of projects come up with a very good idea but because of better planning, these projects fail and dont last. A self repaying could be a reality but with a good proper planning and management.
Posted Using LeoFinance Alpha