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31 sats \ 5 replies \ @cryptocoin 24 May 2023 \ parent \ on: Have you used hodl hodl for borrowing against your stack for mining? bitcoin
Lend at HodlHodl is non-custodial.
The Bitcoin collateral is held in an on-chain multisig transaction.
Doomsday software - Lend at Hodl Hodl 's Escrow Extraction tool
#90862
https://gitlab.com/hodlhodl-public/escrow_extractor
https://medium.com/hodl-hodl/doomsday-software-f71204bde3da
So even if HodlHodl were to disappear tomorrow, the outstanding loan transaction would continue until either repayment or liquidation upon default or failure to maintain margin maintenance requirement.
But seriously ... the halving is under a year away. You do understand the significance of that, I do hope.
Unless you literally pay $0.00 per kWh, your odds of earning more than 1.0 BTC per 1.0 BTC you invest in mining are not very good. '
Stay humble.
Stack sats.
Those tools allow you to withdraw funds without their approval, OK.
But what happens if there's no funds to withdraw?, that's how companies go under, because they lend too much and they cannot pay the withdrawals.
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Alice offers to lend Bob USDT. Let's say $1,000 for one year, 10% interest, 50% LTV,
Bob's "initial loan amount" then is $1,100 ($1,000 principal amount + $100 in interest), so he then sends $2,200 worth of BTC to a multisig contract ($1.100 / 50% = $2,200). That BTC is locked until either Alice releases it to Bob (after he repays the $1,100), or until there is forced liquidation, where Alice gets paid the amount owed her, the $1,100, and HodlHodl then receives the balance. In that forced liquidation scenario, Hodl Hodl then subtracts a 5% liquidation fee (5% of the $1,100 -- initial loan amount, or $55) and forwards the remaining balance of BTC to Bob.
Bob has multiple chances to avoid forced liquidation (3 margin calls, the first at 75% LTV, the next at 80% LTV, and the 3rd margin call at 85% LTV). Forced liquidation occurs at 90% LTV.
So there's no lending of Bob's bitcoin. That bitcoin gets locked into a bitcoin multisig contract until either repayment by Bob results in Alice releasing the bitcoin back to Bob, or liquidation occurs.
Hope this helps to explain it. The margin call page on Lend at HodlHodl's website provides more complete details.
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where does the originating fee go? Why is it not included in the APR?
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Is that normal to include, for example, with mortgage loans? This is not my area of expertise.
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I can share my math mate, of course there are assumptions (network hashrate growth mainly) I am currently on sub 3 cents per kWh. My concern is that HW in Argentina are high so USD/Ths is close to double than in the US.
You know.. I am not willing to let go mining as a bitcoin maxi, 99% of mining today is a fiat centrix venture. The only way I can currently think of to have a healthy ROI is by offsetting sats and drive down my sats/THs cost by borrowing against my stack.
Still undecided but I am looking into it.
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