NEW! Finance
Taking a Finance position by depositing your asset (cbBTC for example) allows you to release equity via our yielding soft pegged stablecoin whilst keeping upwards pricing exposure through our Mortgage product.
It also creates a unique hedging opportunity to preserve your wealth in the case of a bear market without sacrificing the upside of a continued bull market.
Financing with MortgageFi combines our Mortgage and Earn products into one. Our latest vault type now offers users the ability to Finance their token (eg cbBTC) in exchange for a mortgage of the same amount plus the 98% the amount in USD terms in MortgageFi stables which automatically accrue yield. MortgageFi stables can be converted to stable coins at the pegged rate of our liquidity pair on Uniswap which is provided within our UI on the Earn page.
Illustration example
Bob opens a finance position on his cbBTC when the Bitcoin market value is $100,000 by depositing 1 cbBTC using the Finance page. He receives:
$98,000 in interest yielding soft-pegged stables coins that earn variable interest (typically ranging 15%-20% APY)
A mortgage position for 0.98 cbBTC that includes his refundable deposit (that secures the mortgage) for 0.02 cbBTC. The mortgage position has fixed APR interest charge of 18%.
Bob now has the option to convert any portion of his yielding stables into USDC via the Uniswap modal on the Earn page or just wait for the yield to accrue. Accrued interest is visible in the dashboard.
He also has the choice of whether to maintain his mortgage position in order to keep exposure to any upwards price appreciation of his Bitcoin position. As long as he keeps up the repayments on the mortgage the full 0.98 cbBTC will remain mortgaged to him. His repayments if paid monthly will work out to be $1777.78. At any time Bob can choose to early repay his mortgage to release the full 0.98 cbBTC back to his wallet along with the 0.02 cbBTC deposit to return the 1 cbBTC that he started with.
Last updated