Blockchain Use Cases: Compound crypto borrow & lending
Blockchain Use Cases: CDP loan creation with MakerDAO DAI stablecoin
Dezember 11, 2018
Name & author:
Compound Money Markets - by Compound Labs, Inc.
Stage of completion:
PROJECT ready on LIVE chain
Description:
Compound is an open-source protocol for algorithmic, efficient Money Markets on the Ethereum blockchain.
Supply assets to the Compound protocol and earn interest.
Seamlessly borrow assets from the Compound protocol right to your wallet.
APR dynamically adjusted by algorithm - borrow and lend the following crypto assets: BAT, DAI, REP, (W)ETH, ZRX
You can borrow any asset, as long as you maintain a Supply Balance 1.5x your Borrow Balance.
Supply assets to the Compound protocol and earn interest.
Seamlessly borrow assets from the Compound protocol right to your wallet.
APR dynamically adjusted by algorithm - borrow and lend the following crypto assets: BAT, DAI, REP, (W)ETH, ZRX
You can borrow any asset, as long as you maintain a Supply Balance 1.5x your Borrow Balance.
Classification:
evolution / opportunity
Earning interest on your assets is nothing new, and never was limited to your money in bank accounts (think dividends or being a landlord...). Now you can earn interest on your crypto assets as well. (Or short sell a borrowed coin against some other crypto currency.)
Earning interest on your assets is nothing new, and never was limited to your money in bank accounts (think dividends or being a landlord...). Now you can earn interest on your crypto assets as well. (Or short sell a borrowed coin against some other crypto currency.)
Why I like it
(1) It is easy! (If you already have Metamask and some coins of the supported assets in your wallet of course...)
The process is smooth, the interface easy. Some more explanations might have been helpful.
Particularly I have not been able to find anything on the formula calculating the interest rates.
(2) Even though I am totally bullish/long on blockchain tech (and HODL my coins), I believe it necessary for mature markets to have a way to short crypto currencies.
Now Compound only works with Ethereum-based coins though, but it is a start - and an easy one for any retail investor.
(3) The beauty of digital assets is the easy combination of things (and we are just at the start...!). For example you can create a CDP with MakerDAO which costs you 2.5 % APR and get DAI for your ETH. Now supply the DAI at Compound for something like 8-15 % APR.
See my blog post about it here: https://crypto-crack.com/blockchain-use-cases-cdp-loan-creation-with-makerdao-dai-stablecoin/
Beware of the risks - it is by far no risk free arbitrage! And considering the crypto volatility and fast pace, any annual(!) percentage rate seems a bit old school...
The process is smooth, the interface easy. Some more explanations might have been helpful.
Particularly I have not been able to find anything on the formula calculating the interest rates.
(2) Even though I am totally bullish/long on blockchain tech (and HODL my coins), I believe it necessary for mature markets to have a way to short crypto currencies.
Now Compound only works with Ethereum-based coins though, but it is a start - and an easy one for any retail investor.
(3) The beauty of digital assets is the easy combination of things (and we are just at the start...!). For example you can create a CDP with MakerDAO which costs you 2.5 % APR and get DAI for your ETH. Now supply the DAI at Compound for something like 8-15 % APR.
See my blog post about it here: https://crypto-crack.com/blockchain-use-cases-cdp-loan-creation-with-makerdao-dai-stablecoin/
Beware of the risks - it is by far no risk free arbitrage! And considering the crypto volatility and fast pace, any annual(!) percentage rate seems a bit old school...
