Let's talk, fam, because I love you.
There are a lot of you borrowing $USK from @TeamKujira Ghost at 51% or thereabouts.
You don't have to do that. You never need to borrow $USK.
Let's talk alternatives to borrowing $USK that (eventually) get $USK, at much lower rates.
1. Borrow USK (ick)
I mean, the first way to get $USK is what you're doing: you borrow it at 44% annual borrow rate (is that ... 'ABR'? Did I just invent a term?)
But like, why?
Don't answer that. I don't want to see the mental gymnastics required to justify an answer.
2. Borrow axlUSDC (okay)
If you are going to borrow, borrow, instead $axlUSDC at 7%.
So: you borrow $axlUSDC on Ghost, then swap to $USK on FIN.
Borrowing $axlUSDC is still 7% 'ABR' (keep up). Can you do better? Yes, ... and in multiple ways.
3. Borrow a volatile asset (good)
One of the ways is that if you have the $axlUSDC already (that you bridged from other chains, like I do), then you can borrow an asset at 2%+ and swap THAT to $USK.
The borrow-volatile-asset-approach, an asset being $ETH in this case, but that asset can be any of the borrows, is NOT borrowing $axlUSDC or $USK (stablecoins), so there may be a lower ABR, but there are caveats, so let's discuss those caveats.
Caveats
- You'll mark my word-choice: I said 'trade' not 'swap.'
As Scammoon told me,
"Amateurs do market-orders [swaps];
Professionals do limit-orders."
Set, then forget, your limit order.
Otherwise, if you fat-finger in a market-order, you most likely will pay (much) more.
Now, I just blithely tossed that 'set limit orders'-caveat. Limit orders took serious adjustment for me. You have to know where to set them, and how much, then you have to be patient and smart.
Limit orders aren't market orders, and vice versa.
- Part of being smart, when you're borrowing an asset to trade to $USK, is knowing which order books can support your asset-trade.
When you place an order, will your trade be met?
For 75-85 of the 95 order books on @TeamKujira FIN, that answer is a resounding 'no!'
"'No!'?" you demand, ...demandingly.
Correct: no. Most of the order books on @TeamKujira FIN don't have the liquidity to support orders of even only $100, not timely nor competitively, at any rate.
"Which orders DO support orders timely and competitively?" you ask, ...askingly.
That's why you must follow me here and also bookmark and subscribe to my blog. Why? Because I make money?
NUPE. WRONG!
It's because I update order books stats daily here and archive that on my blog – get this:
FO' FREE!
So I publish a report of FIN volumes daily. So what? Who cares?
The report, if read correctly, tells you which order books are active. Active order books fill trades.
You want to trade on active order books to get your orders filled.
YOU care about FIN order book volumes.
And who publishes all order book volumes daily?
You're lookin' at him.
- The suave, debonaire, handsome, and all-around good guy: me.
"WHY do you do this selfless act of selflessness, o, el geophf?"
Because: see 1.
"HOW?" you ask.
And, we finna come to
- volatile assets may have lower ABR's than $USK (obvies) and $axlUSDC (maybe), but: they are volatile.
You don't sit on a borrow of a volatile asset, you trade it now and you trade it fast to get you your $USK, do you your $USK-thang, then pay back the volatile borrow WITH EXPEDITIOUS ALACRITY! ... otherwise your borrow may become an unmanageable burden, leading to liquidation.
This concludes the caveats on borrowing volatiles.
The Three Nevers of Borrowing
Oh, and my financial planner told me the following:
- Never borrow a volatile with stable collateral
- Never borrow a stable with volatile collateral
- NEVER borrow one volatile type with another volatile type collateral.
Since my portfolio contains each of the above 'nevers' (PT) AND contains even a smidge of cryptocurrency, the look of terror that crosses his face every time we have our monthly meeting to discuss my financial plan is straight-up hilarious. 🤣
But those 'nevers' (P-PT) are there for a reason, and, the reason is, if you do do any of those 'nevers', you highly increase the possibility of having your collateral liquidated.
I know. I've been liquidated many, many, MANY times.
I've lost count after my 12th liquidation.
"So why borrow at all, o, el geophf, if you're going to [likely] be liquidated?" you ask, shocked, just like my financial planner.
Leverage has built my portfolio from $22k to $86k in less than a year. 🎉
I've not lost from liquidations: I've GAINED from LEVERAGE. #perspective
Midsummar(y)
(ya see wat I did wid dat?) 😎
Okay, mid-term. (don't panic; I come in Peace 🕊️)
We've covered, so far:
- Borrowing $USK (ick)
- Borrowing $axlUSDC (okay)
- Borrowing volatiles (good)
Now let's look at other ways to obtain $USK that have even lower ABRs.
Mint USK (good)
- Instead of borrowing at all, why not transfer the collateral to @TeamKujira BLUE and MINT $USK, instead.
Most minting assets have a 1% ABR, except, notably, $LUNA (2%).
Don't borrow $USK: mint it.
Trade for USK
And, finna:
- Trade an asset for $USK
$USK has 56 FIN order books.
Using graph theory, ANY asset traded on FIN can (eventually) be traded for $USK
This latter half is short and sweet.
Notice something about 4) minting and 5) a direct trade?
There's 0% ABR associated with both.
Does that mean minting and trading is then best?
No, not necessarily. EACH of these five ways of obtaining $USK gets the result you need.
It falls upon you to determine which way works for you. Which way do you like? Which way works best for you?
Go with that.
So why write this HOWTO if you get to choose? My concern is that too many Kujiraeans borrow $USK at a high ABR, not knowing there are alternatives that may be better for them.
This article enumerates those alternatives.
Skål!
