Excellent analysis Duo! I know you don't have a 100% certain answer but how do you see this affecting other parts of the AAVE ecosystem? Say I run a "safe borrow loop" using ETH as collateral with a "safe" LTV of 40% and compounding/adding monthly? Do you estimate the market crashing forcefully or will it be relatively controlled?
Your risk here is ETH price crashing. You'll have 2-3 days to manage it imo since ETH rarely crashes more than 20% per day. So you'll have time to react.
What I highlighted above is that a 2% depeg on USDe can start a cascade liquidation queue. This should not impact you directly, but if USDe mcap goes into 20-50 bil, it will impact everyone when it blows up.
Just have cash ready to pay your debt when prices crash. You'll have time to get out. Either way, when you see risks increasing, reduce your LTV just to be safe. LTV under 40% is generally good.
Ena will crash hard, but not before reaching its cycle high.
Its actually my favorite coin to trade given its huge volatility
Yes great farming this. :)
Excellent analysis Duo! I know you don't have a 100% certain answer but how do you see this affecting other parts of the AAVE ecosystem? Say I run a "safe borrow loop" using ETH as collateral with a "safe" LTV of 40% and compounding/adding monthly? Do you estimate the market crashing forcefully or will it be relatively controlled?
Thanks!
Your risk here is ETH price crashing. You'll have 2-3 days to manage it imo since ETH rarely crashes more than 20% per day. So you'll have time to react.
What I highlighted above is that a 2% depeg on USDe can start a cascade liquidation queue. This should not impact you directly, but if USDe mcap goes into 20-50 bil, it will impact everyone when it blows up.
Just have cash ready to pay your debt when prices crash. You'll have time to get out. Either way, when you see risks increasing, reduce your LTV just to be safe. LTV under 40% is generally good.
Thanks Duo! When do you think this crash could taket place? I know it's hard to give a firm date but an estimate...?
When USDe mcap is higher than it should :)) its already getting high imo
Good to know
Welcome!
Wow You Always Comes up with Different perspective. Not sure I'm agree with all but Respect all