How to get a Tesla without spending a dime

Although Decentralized Funding (DeFi) has been used extensively for rampant speculation in the market, there are other use cases that allow individuals to make a profit without staying up late at night. For example stablecoin loans, which offer a much higher return than conventional products with a comparable risk. Or arbitrage bots, which enable tech-savvy traders to profit from tiny price variances.

One intrepid DeFi user revealed a clever strategy that allowed him to buy a Tesla Model Y ($ 51,490) with the power of cryptocurrencies. How did you get it? Is it a tactic we can do ourselves?

Connect DeFi to the real world

Once you’ve studied DeFi, the principles of AaronNg they will look familiar to you. If you haven’t, you can disappear into the Google hole in this story and look for ways to make your own fortune work for you.

How to get a Tesla without spending a dime
How to get a Tesla without spending a dime

Recently Ng, Former Facebook employee and long-time user of cryptocurrencies, iHe decided to buy a Tesla with cryptocurrencies. However, a friend advised him against it and pointed it out You can only keep your valuable digital assets when you buy the vehicle with the return on your savings.

DeFi protocols for the uninitiated allow investors to earn a generous annual percentage return on their digital assets by lending them at a pre-agreed rate (APY / AnnualPercentageYield). In a world with banks where interest rates are low to negative, DeFi offers the opportunity to generate passive income without risking the lot in the notoriously volatile cryptocurrency markets.

While DeFi protocols are not without risk, Many shrewd investors make the most of their unreliability. Anyway, back to our Tesla driver AaronNg …

Ng recently used an ETH secured loan to cover the $ 10,000 down payment on the Model Y. Simply put, it means that 10 ETH (valued at around $ 20,000 at the time) pledged as collateral to open a LUSD 10,000 loan, which in turn was used to cover the deposit.

Isn’t it normal to pledge part of the guarantee to get a loan? Well, not really: it’s a difficult process in traditional banking, with a lot of paperwork and inconvenient interest rates. Using the liquidity protocol, Ng accepted a one-time fee of 0.5% to purchase an interest-free LUSD loan: only $ 500.

Of course, a deposit is just that: a deposit. AND Ng was still addicted to the $ 10,000 loan.The smart thing is what he did next.

To cover the monthly lease payment of USD 700, Ng blocked a separate crypto asset called Curve (CRV) on a sharing protocol that offered over 70% APR. “With a stake of 20,000 US dollars, I make about 1,200 US dollars a month,” he stated, “700 of which will be used to pay the lease and another 500 to pay the loan.”

“Since the liquidity loan has no repayment date or interest, I can adjust this second amount as needed. At $ 500 a month, it will pay off in about two years.”

Everything that glitters …

And this is how you buy a Tesla without spending any money. If all goes well, at some point Ng will unlock his ETH guarantee (which may have been appreciated at the time) and drive into the sunset in his Model Y. possibly laughing in recognition of his own ingenuity.

It goes without saying that this little plan is not without its risks. To be fair, the value of a token could go down; or the staking protocol’s cheap interest rates could go away. The loan could also be liquidated if the value of your ETH collateral falls below the collateral to loan ratio.

Oh, and let’s not forget that Ng (unlike many aspiring DeFi heroes) was able to guarantee $ 20,000 worth of ETH while wagering another $ 20,000 for a return. This isn’t exactly a handicap story.

Perhaps the lesson here is that DeFi is a gateway to emerging financial primitives that, if properly informed and aware of the risks, can be used to your advantage. I’ll be right back, I’ll rent a Lambo …

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