I actually do report all my buys and sells through centralized exchanges. It's just usually so little that it never meets the criteria for reporting when my accountant does my taxes. I'm seriously interested in this whole collateral thing. It's just taking a bit for me to wrap my head around it. As I've said in the past, it feels too good to be true, so I assume I'm missing a piece that represents the downside to it.
The main downside is complete systemic failure of the Thorchain ecosystem.
Thorchain community is confident they can offer this good deal and not fail in the long term.
I don't know if they can or not (I think it will fail in 2027).
But if they are stupid enough to offer such a good deal we should probably capitalize it before they realize their mistake. 2024 is the year to do it as 2025 is the insane bull market year where anything can happen.
That makes sense. I still can't quite figure out what I would use the funds for. I mean say I had $2000 BTC I wanted to put in. That gives me $1000 in loan money? I don't know what I would do with it.
If it's not worth it then you'd just do a higher amount.
Leveraging long just means selling the $1000 into another asset you're bullish on.
In fact that asset could just be Bitcoin itself.
You can stake Bitcoin and borrow Bitcoin in the same operation.
In fact you can borrow direct any asset that Thorchain has to offer.
I actually do report all my buys and sells through centralized exchanges. It's just usually so little that it never meets the criteria for reporting when my accountant does my taxes. I'm seriously interested in this whole collateral thing. It's just taking a bit for me to wrap my head around it. As I've said in the past, it feels too good to be true, so I assume I'm missing a piece that represents the downside to it.
The main downside is complete systemic failure of the Thorchain ecosystem.
Thorchain community is confident they can offer this good deal and not fail in the long term.
I don't know if they can or not (I think it will fail in 2027).
But if they are stupid enough to offer such a good deal we should probably capitalize it before they realize their mistake. 2024 is the year to do it as 2025 is the insane bull market year where anything can happen.
That makes sense. I still can't quite figure out what I would use the funds for. I mean say I had $2000 BTC I wanted to put in. That gives me $1000 in loan money? I don't know what I would do with it.
You'd either be leveraging it to go long on 0% APR or transferring the money to your bank account.
That's almost not worth it to move it to my bank account :) Guess I need to take a crash course in what leveraging and going long means.
If it's not worth it then you'd just do a higher amount.
Leveraging long just means selling the $1000 into another asset you're bullish on.
In fact that asset could just be Bitcoin itself.
You can stake Bitcoin and borrow Bitcoin in the same operation.
In fact you can borrow direct any asset that Thorchain has to offer.
Oh, okay. I'll have to look into it. That makes a lot more sense now.