Hey guys. I don't want to sell my btc, but I need some money for my family vacation. I looked around several DeFi platforms where I can lock wrapped BTC and get stablecoins, also looked to companies like SALT and Unchained.
You go from Bitcoin to a token Wrapped BTC, that is not Bitcoin.
With this first step, you no longer own any bitcoin, but own a token which can has value pegged to bitcoin price but can be zero if its peg losses like a bad stable coin UST depegs in 2022.
A next step is also bad, lock your Wrapped BTC token to a DeFi platform, in their staking or liquidity provider pool. You can not know that DeFi platform will stay or collapse or bankrupt like Celsius, Voyager, BlockFi, or scam exit.
I don't like 2 things: high interest rate and liquidations. Anyone took BTC backed loans? What is your experience?
Looking for high interest rate (high APY), you are taking bigger risk.
If you see you take risk with all three steps, is it still safe for you to do this?