DeFi gives us these crazy things! As you say, the loan can be used to buy crypto. And that crypto can then be offered for others to loan again. And then you get yourself a loan again. I think this can be repeated many many times, ie many levels deep. Recently I saw someone in a YT film doing this 10 levels deep and ending up with 300 or 400% over collateralisation. Looks like DeFi allows all of us to play the same game as the banks do in the fiat world {LOL} Not saying we shall not do all of this, but I think it is super funny DeFi is making this happen as well.
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Definitely! The banks need to stop being so greedy. They make so much off us & only offer 0.1% to most people. DeFi levels the playing field & allows for so much more.
Sure DeFi is cool but it offers us the same bad tricks as banks do, that was my point, ie over collateralise, take much more money out of the system than we provide as collateral. That point is not so good IMHO {LOL}
Yes some places are better than others for sure! Things move so fast too, like Venus protocol on BSC the liquidation rate is really high, & their stable coin is anything BUT stable! Seems like ancient tech now even though it's about a year old lol. Flash forward to Qi Dao on Fantom chain & there's a much better user experience all-round. Trouble is there's nobody to call if it all goes wrong in DeFi.. It's a trade off I suppose, and as you say, you need to have the asset first to be able to draw from it.
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