Burrow #alpha
Once burrow is live on NEAR mainnet, it will allow an interesting pattern of investing.
Burrow liquidations minimize the discount a user pays through the game theory of getting it first by competing liquidators. Read more here: https://github.com/NearDeFi/burrowland#liquidations
Details below
It means you'd be able to put USD* as a collateral and burrow NEAR. Then you can stake that NEAR and earn about 11% APR on it. If the price goes up, you will be liquidated and maybe going to pay 1-2% in discount on the way (which is like a fee when you buy), but if NEAR price goes down, you are not going to be liquidated, so you can increase your position more, because your collateral in USD* still keeps your value.
@mob If I am not profiting from NEAR growth, the main source of income is 11% from staking. Roughly speaking, I put stablecoin at 11%. But there are more opportunities in DeFi where i can deposit my stablecoins with such %, Then why use the Burrow?
@haenko you profit from near growth, because during liquidation you keep your near, but lose stables. The only caveat if the price retreats.
So it maybe one of the best way get into the risk on positions.
But it does have some caveats: like interests paid on the collateral and borrowed assets may be different, so your staked rewards will be canceled by NEAR interests.