7 ms·
Not financial advice. Numbers are just examples. 0: Buy 10000 USDC with $10000 1: Deposit 10000 USDC on AAVE 2: Borrow 5000 USDT 3: Sell 5000 USDT for 5000
by nerf0 4y ago
Not financial advice. Numbers are just examples.
0: Buy 10000 USDC with $10000
1: Deposit 10000 USDC on AAVE
2: Borrow 5000 USDT
3: Sell 5000 USDT for 5000 USDC
4: Wait for USDT to drop to $0.5
5: Buy 5000 USDT with 2500 USDC
6: Repay 5000 USDT and get back 10000 USDC
7: Profit: $2500
- mkj 4y agoThat won't work if USDC also drops?
- nerf0 4y agoCorrect. Here I'm assuming USDC is "stable". If USDC drops (or if USDT rises, for that matter), you might get liquidated.
- vizzah 4y agointerest on borrowing? How much it costs to keep the position per year?
- nerf0 4y agoDepends on market conditions and the lender you use. Currently around 4% on AAVE. If demand rises this can go up obviously. Note you do get interest on your deposit so that helps offset it a bit.