DeFi

🌀convert tradfi loans to eth exposure

if you get a traditional loan from a bank, what are the risks associated with buying sETH with the loan, and then depositing it as collateral for a high LTV USDC loan?

worst case you lose the underlying collateral, but you still have the USDC.

You have to payback the tradfi loan eventually and you may have lost up to 14% of the collateral?

you probably don’t think about liquidity enough // it is what it is  // build value, not valuation

| 🎩  |  ↑  |  ⌐◨-◨

paying back the tradfi loan irrelevant here cuz your just adding eth exposure.

the USDC can go back to whatever you needed the loan for.

u were gonna payback the tradfi loan wether you get the eth exposure or not.

i am suggesting that there is no downside to the eth exposure.

take 100$ personal loan
buy 100$ eth
borrow 90 USDC
now u have 90$ + 100$ exposure to ETH.

wdym irrelevant? Tradfi has minimum payment requirements - if you are short the debt, eventually there are repercussions?

I’m missing something you’re reaching for I think