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@kbrot thanks for the liquity recommendation. I feel like an idiot for using MKR all these time. I seriously have no idea why LUSD is not used more with the low fees that they are giving.
When there is a crash and you need to delever, LUSD tends to go up in price a penny or two, which can really increase your repayment costs relative to shorter term maker loans.
Fair enough, but with a 3%+ interest on maker for vanilla ETH, if you’re pretty under leveraged, it is a no brainer IMO.
And you’re not in a hurry to close your position since it is a one time fee, not to mention lower collateral requirements.
For sure, liquity is pretty great. As to why it’s underutilized, it’s similar to what mouse is saying. Particularly in the early days, LUSD commonly ranged from 0.97 to 1.03. It was always fine in the end, but it requires that one extra step of making sure you’re repaying at a beneficial time (or buying troves at a beneficial time). And of course, any add’l step makes a protocol slightly less tasty. I think the range is much smaller these days with added liquidity.
Fair enough. I have basically abdicated from Maker due to their weird changes with the new ‘endgame’ roadmap.
Is there a similarly big lending protocol in L2? I imagine gas costs would be quite prohibitive during the bull