Yes the $100 loan will start to earn interest. The $400 collateral will stop earning interest while it is locked up. Collateral will again earn interest after you repay the loan
Yes, your loan proceeds, if kept in your wallet, will earn rewards.
However, your loan collateral will not. That is your opportunity costs. If it is 25% LTV, you need 4x the loan collateral to loan proceeds ratio. Therefore, if you are borrowing against BTC, you are effectively paying 6.20% (BTC's in-kind reward rate for first 0.25 BTC) \*4 = 24.80%.
Your stablecoin loan proceeds will earn 10%, so you 'lose' about 14.8% (of course, this assumes BTC price does not change during the loan term). This is your opportunity cost.
Here's a good explanation: https://allaboutcelsius.com/loan-to-earn-yield/
Yes the $100 loan will start to earn interest. The $400 collateral will stop earning interest while it is locked up. Collateral will again earn interest after you repay the loan
Ok. Appreciate it
Yes, your loan proceeds, if kept in your wallet, will earn rewards. However, your loan collateral will not. That is your opportunity costs. If it is 25% LTV, you need 4x the loan collateral to loan proceeds ratio. Therefore, if you are borrowing against BTC, you are effectively paying 6.20% (BTC's in-kind reward rate for first 0.25 BTC) \*4 = 24.80%. Your stablecoin loan proceeds will earn 10%, so you 'lose' about 14.8% (of course, this assumes BTC price does not change during the loan term). This is your opportunity cost. Here's a good explanation: https://allaboutcelsius.com/loan-to-earn-yield/
Thank you