Asset Recovery Strategy

The strategy in this article explains how to launch assets that are currently at a loss and then hold them until they reach their desired price. For this we use Venus Protocol as a lending platform.

How To Borrow Crypto Assets

If market participants are holding digital assets like Bitcoin, Ethereum, or Litecoin and find themselves in need of liquidity, there's an option to leverage these assets as collateral for a loan, typically ranging from 70% to 90% of their value.

This approach offers a convenient solution if crypto and traditional market participants prefer not to sell their funds but require access to them. Repayment is structured in regular installments, and as long as payment deadlines are met, the ownership of the crypto assets is retained.

Essentially, a crypto loan operates as a secured personal loan, with the crypto holdings serving as collateral to secure the loan amount.

Assuming timely payments, the crypto assets are returned to at the conclusion of the loan term, which may span anywhere from 12 to 60 months. However, failure to meet payment obligations could prompt the lender to liquidate the collateralized assets to recoup the owed funds.

The loan amount eligible typically correlates with a percentage of the value of the crypto assets offered as collateral.

What Is Venus Protocol

Venus Protocol is a decentralized lending platform powered by Binance Smart Chain.

The Venus protocol sets out to facilitate cryptocurrency lending and borrowing, positioning itself as a prominent player within the Binance chain ecosystem.

Functioning as an innovative algorithmic money market protocol, Venus has been rolled out on the Binance Smart Chain. Much like its counterparts in the money market space, Venus operates on a pool-based lending model, where lenders contribute liquidity by depositing their dormant assets to earn interest, while borrowers gain access to these assets by providing collateral.

Within this framework, various factors such as interest rates are dynamically determined through algorithms, responding to the supply and demand dynamics of each asset.

Leveraging the infrastructure of the Binance Smart Chain, users gain access to a comprehensive array of assetsavailable on the Binance platform.

Crypto Strategy Implementation

• The Venus protocol allows to use many BSC network coins as collateral.

The BSC network guarantees a low transaction fee, but we need a small amount of BNB to pay for it.

• Say we exchanged Matic coins for $1,000 at the peak of a bullish trend at around $3 each. At the moment, MATIC is in the red zone.
• We transfer our MATIC from the Polygon network to BSC with SimpleSwap.

• We then deposit MATIC in the BSC network on the Venus platform and receive an annual interest rate of 0.93%. The rate may change depending on the growth in demand for the coin.
• Then we take out a loan at 4.89% per annum in DAI for 50-60% of the collateral. We do this to avoid the liquidation of the collateral position in case of a massive drop in the MATIC value.
• We send a third of the received DAI to a collateral position at 4.15% per annum. By doing this, the collateral position can be strengthened, and the interest rate on the borrowed funds can be covered.

• With the remaining DAI, we purchase any coin on the selected network using SimpleSwap. In this case, we chose to buy ADA on the BSC network.

• Using the borrowing platform, we leveraged the current MATIC value and purchased ADA into our portfolio at over 80% below ATH. We also managed to keep MATIC anticipating the price we needed.

Users can get all above mentioned coins on SimpleSwap.

Summary

Launching crypto assets at a loss and holding them until desired prices are reached requires a strategic approach that combines leveraging lending platforms like Venus Protocol with prudent borrowing and investment strategies.

By utilizing assets as collateral for loans, investors can access liquidity without selling their holdings, allowing for asset price averaging and portfolio growth.

The Venus Protocol, operating on the Binance Smart Chain, offers a decentralized lending platform that facilitates cryptocurrency lending and borrowing, providing users with access to a wide range of assets and competitive interest rates.

By implementing the strategy from this article, investors can navigate bear markets effectively, maximizing their opportunities for long-term gains while managing risk.