Oddbean new post about login | logout How do you do that? With what do you pay back the loan? With a new one?
Depends on what you need to do. There are many good options. Firefish.io is Bitcoin-native, or you can open long future position, that is also a loan. I don't pay back the loan. When interest rate is lower than inflation and when Bitcoin's upside potential is higher, it does not make sense, I just have an open credit line. I can pay it back any time, so no stress from the loan. https://hackyourself.io/product/how-to-harness-the-value-of-bitcoin-without-having-to-sell-it-ebook-mini-course/ https://hackyourself.io/product/how-to-harness-the-value-of-bitcoin-without-having-to-sell-it-a-path-to-your-orange-citadel-and-a-way-to-short-fiat-currencies-paperback/
Can you do it while keeping self-custody? I know people who tried this with Celsius. Obviously, it didn't end well. 🤷♀️
To various extents yes. Obviously there needs to be a way to liquidate the loan, but there are many good approaches. Firefish locks your collateral in 3-of3 a multisig with liquidator (see their protocol documentation, it is open). Liquidation oracle has pre signed transaction to the liquidator, so the oracle can't sell it or move your coins anywhere else. Another approach is through futures, there are also many options, you control your risk appetite vs convenience. For example with 10101 you get a DLC channel. In both of these you see your coins in a UTXO, so you can verify at all times it's not moving (Celsius was gambling with user funds). Another option that would work is taking the other side of stablesats channel. Not sure in anyone tried that. Also note that the alternative is selling your sats, which is the ultimate loss of custody.