If USDT implodes to $0 then you'll have nothing to pay back.
You can even deposit the USDC to, say, Yearn and cancel out your interest expense.
Of course, I do not expect USDT imploding anytime soon, so don't do this. Although it's often the preferred stablecoin to borrow because when it does implode, you will be lucky (assuming it goes under the peg).
Oh, this is perfect, I'm going to do this with 100k. Also, yeah it is shorting, but it's honestly less convoluted than how I have to do it on Kraken. + I get profits off staking.
Edit, did it with $500 as a test, I am arbitraging 0.5% as I took the tether I borrowed, turned it. into USDC and staked it. I am getting paid 0.5% to short Tether :O
But there is no lending/borrowing market or a decentralized exchange on Stellar. Besides, when you deposit USDC to Compound Finance you will earn interest plus COMP tokens that can cover your gas fees.
Anyways, there may be several competing options coming in the future, but Stellar is just not it.
All of the above exchange links that I've visited required account registration and login, which means that they are not decentralized. For the celsius, you have to download an app on your phone. Ewwww. Whatever. Claiming to be decentralized and then requiring signup is dishonest.
It looks like there is not not much liquidity. Also, the only type of exchange supported is "Limit Order", which is also cumbersome to use on a blockchain, and you would probably prefer Automated Market Maker (AMM) type exchanges once you experience them. (You can perform all the steps I've outlined in a single transaction for example)
Also, it looks like that all the assets on stellar are custodial. There are no non-custodial stablecoins for example.
> Claiming to be decentralized and then requiring signup is dishonest.
I find it hard to believe that you honestly don't understand the difference between an independently developed client and the decentralized exchange which it connects to.
> you would probably prefer Automated Market Maker (AMM)
See Kelp above.
> There are no non-custodial stablecoins
This subthread started with your recommendation of USDC, a custodial stablecoin...
…which, lest we forget, went live on Stellaräs decentralized exchange this month:
USDC was just an example, you can use non-custodial coins too. Looks like stellar only offers custodial.
Look, I get you. There is some degree of decentralization, although not fully decentralized. There's definitely a lot more smoke and mirrors there, especially when I need to register to these websites.
The other problem is that Stellars consensus protocol is not sufficiently decentralized.
Regular users may not care about that, which is fine. However, that's a crucial point for me.
> There is some degree of decentralization, although not fully decentralized.
Please stop spreading disinformation.
> There's definitely a lot more smoke and mirrors there, especially when I need to register to these websites.
Again: those are independently developed and managed web apps which provide a nice graphical user interface to Stellar's decentralized exchange.
You don't need to use them to access the exchange. If you do, the accounts you create with them are unrelated to the exchange; they are specific to those web apps, and serve obvious purposes like helping you keep track of your trades.
None of this is even remotely hard to understand for anyone who knows anything at all about the subject. That somebody who claims to be more than a regular user would fail to understand it is not credible.
Totally, just a minor quibble, they don't have audits, they have attestations. That's not the same thing, it's much less detailed. I'm not particularly worried about the existence of their backing assets, however, it's just worth noting.
I was referring to the Circle entity in the event of a wheels-come-off situation.
USDC is an example, it's not necessary that you use USDC, there are a few other currencies that can be used for collateral and swapped in to while you wait. Let's be clear: "Do not do this" means do not do this in whatever variation.
1. Lock up your USD to USDC (get some ETH for gas)
2. Go to https://app.compound.finance/
3. Deposit the USDC as collateral
4. Borrow USDT (Tether)
5. Sell the borrowed USDT to USDC
6. Wait until USDT implodes to $0
If USDT implodes to $0 then you'll have nothing to pay back.
You can even deposit the USDC to, say, Yearn and cancel out your interest expense.
Of course, I do not expect USDT imploding anytime soon, so don't do this. Although it's often the preferred stablecoin to borrow because when it does implode, you will be lucky (assuming it goes under the peg).