Taking loan in Smart BCH from blockNG instead of selling in loss
This is always been a bad habit of mine selling assets in loss for buying other stuff and I'm that one guy who always divide his portfolio into many things except having the main coin which is BCH
So i always invest my 100% bch which i call is bad habit and taking more risks sometimes too good and sometimes completely broke
Now after investing 100% bch in multiple tokens i came to that point where i cannot sell anything because of huge losses so decided not to sell anything in loss when you can take loan from blockNG within seconds.
I've heard about taking loan and lending many times but have never tried before so it is first time stepping in this lending thing and I'm not sure if it was my good decision or the worst one
But with this article you'll have idea how you can borrow BCH or stable coin without selling your assets in loss when you need urgent money.
Though I'm still not sure about so many things because it's first time so DYOR before borrowing or taking loan is must and there's no financial advices ahead.
blockNG lending protocol
Reason blockNG is best project with utility on SmartBCH is it's whole ecosystem and protocol so couple of weeks back they introduced lending
And those who don't know lending is a thing which allow a person to use the sum of money under an agreement to pay it back later
But it's not bank from where you're going to take money on loan it's decentralised DeFi protocol where everything is under control with risks.
blockNG lending is different from banks because it's decentralised without any bank manager on other side delaying and making excuses
On other hand you're the one giving something as a collateral which is necessary and rest of thing's I'll explain in details.
Collateral in law and BCH
There's only two collateral for loan which is law blockNG token itself and BCH as well
It's upto person choice whatever choose for collateral and for those who don't know what Collateral is let me clear your confusion.
Collateral is something pledge as security for a replacement of loan just same as taking loan from banks by putting house up as collateral
So taking loan from blockNG need law or BCH as collateral after giving law we can take loan as per limit.
I took loan putting up law as collateral
It was urgent and necessary for me to take loan for some reasons I don't have any choice left because everything i was holding is in loss and selling was not an option
That's why i put law as collateral so i can borrow some money
I was holding law since I've sold alien and also bought additional from recent dips so it was a good choice to put them as collateral instead of selling in loss or maybe I'm wrong but i managed risks so let's see what's coming ahead.
Maximum collateral ratio
I've said there's only BCH and law so both have maximum collateral ratio
For now I've seen both BCH and law have same maximum collateral ratio so liquidation fee is 12.5% which is highest and 0.5% borrow fee so everything is clearly seen nothing running on background.
We can borrow lawusd stable coin
It's good that we are getting money in stable coin so lawusd is stable coin maybe pledge with flexusd correct me if I'm wrong
So borrowing money in stable coin is perfect choice but there's a limit of borrowing
We cannot borrow 500lawusd putting up 300usd worth law as collateral
So for example i want to take 1 bch loan and have 1000 law so I'll get maybe 350lawusd.
Well i borrowed in lawusd and later converted into BCH just to experiment now I'll repay the loan very soon because I don't want to get in trouble.
Though i was confused what will happen when law price will go up? Like suppose i bought loan after putting 500 law on collateral at a price of 0.53$ and i got 300usd so if it price value pumped to 0.6$ than I'll get liquidated or what?
Just want to clear this confusion if anyone know please feel free to explain it down.
I re-payed loan after bridging BCH
Just because of liquidation fear i decided to shift some BCH to Smart BCH and pay back the loan it was just to try how it works and experience it
So it is faster than i expected and easiest as well just confused how I'll get liquidated or it's side effects.
And so this was for just educational purpose I'm really stuck so badly in few things need your love and support
Also let me know if you have ever borrowed money from blockNG or any other lending platform.
Though bridging BCH becomes my headache it was a worst experience through hop.cash first time ever it took an hour to reach in Smart BCH and in the middle my internet signals went to zero which is why transaction was stuck in the middle and was scared a bit but i got in the end and went to pay the loan back to blockNG
So I'm better than that one friend who take loan and say will give back to you soon but he never give back so blockNG peoples like me are too rare.
This is the first time i will hear this. Never knew one can get loan on smartbch too.