[00:01] Coinbase. We're going to be borrowing dollars against, for example, Bitcoin. and then down at the bottom, press borrow. If you can't see this, it might
[00:13] not be available in your region yet. The way this works is that we are going to borrow USDC, which is a US dollar stable coin against the value of the crypto that we have on the platform. I'll use Bitcoin just to
[00:26] keep things simple. Now you have that USDC once you borrow it in your account. You can withdraw it over a crypto network if you want to use DeFi. You can want to do that, if you have a Coinbase card. Or if USDC isn't your native
[00:43] currency, you can switch it to your local fiat in Coinbase and then withdraw made the borrow, that is yours. You can do whatever you want with it. What we're doing on Coinbase is taking a collateralized loan, which means that we
[00:56] have to put up some Bitcoin. For example, let's say we have a thousand dollars of Bitcoin there. We can only borrow a certain percentage of that. The borrow a certain percentage of that. The maximum is around 75% loan to value.
[01:09] Loan to value of our Bitcoin. 75%. If I put $1,000 of Bitcoin here, I can borrow put $1,000 of Bitcoin here, I can borrow maximum around $750. So 75% loan to maximum around $750. So 75% loan to value. That is the absolute maximum.
[01:22] more than that. This is a DeFi loan. Actually, Co Coinbase using DeFi in the background. So, what will happen if we get up above 75% is we get a margin call where the protocol and Coinbase will literally say, "We don't want to have
[01:38] your loan to value any more than this. Please add collateral." So, add Bitcoin and that reduces the loan in relation to the Bitcoin value. Or pay off the loan and that obviously reduces the loan to the Bitcoin value. So let's say that we
[01:52] have the same loan but Bitcoin falls 10% in price which is you know easily going to happen. Well the loan to value goes to 83%. This is unacceptable for the D5 they'll do firstly is send you a message saying immediately add collateral value
[02:06] or pay off the loan. And then if it gets up to a certain percentage I think it's 85% or something they will just sell your Bitcoin out and pay back the loan asked. So, you have to make sure that 75% is the absolute maximum that your
[02:20] loan to value gets to and probably borrow much less than this. I would also conditions as well in the app. You can scroll down. All of these FAQs is going to show you how much you can borrow, when liquidations may happen, etc. So,
[02:33] what we're going to do is create a new loan. You can see the assets that we've got in the platform. Soul, ETH, uh BTC. I think a couple of other assets may be will show them here. So, I've got some BTC on the platform. So, let's press
[02:47] start. And what we're doing here is borrowing USDC against Bitcoin. Notice dollar value of how much Bitcoin you have on the platform. The variable rate. Now, we are taking a variable loan here. So, a variable term, we can pay it off
[03:02] within 5 minutes or 50 days or anything because the term is variable, the No one is going to give us a fixed interest rate for a variable term. And
[03:15] 4.73%. And now this is going to change over time dependent on supply and demand in the market. So 4.73% right now is pretty good as an interest rate. But in a bull market you may find that borrow demand
[03:30] increases which means the interest rate may go up. So you may start borrowing quite low but if you keep the borrow open you may see the interest rates rise mind in terms of uh what you think you may pay and how long you think you may
[03:44] need the the dollar loan for. The term is flexible here and the processing fee is outrageous, right? 1 to 2% is unbelievable. But it's Coinbase got the highest fees in the industry, bar none. Um, you can use DeFi directly yourself
[03:57] that, then you don't pay any fees at all. Um, and I've got some videos on know how to use DeFi. But we're going to press continue here. And then we just to borrow. So let's say that I want to borrow $5. And notice LTV just above $5.
[04:16] So we're working out if I borrow $5 and I've got a 50% LTV. Well, that means I need to tie up $10 of Bitcoin, right? Because five is 50% of 10. So you can see down here I'm borrowing and then the required collateral $10. So very simple.
[04:32] 50% of 10 is five. That's what we're borrowing. and I'm tying up $10 of collateral. The reason we're looking at LTV here is because during the period of your loan, you have to figure out how volatile is Bitcoin going to be because
[04:46] if I take a 75% loan to value and I think Bitcoin is going to fall 50%. Or it could fall 50% during the time of the loan, then it's guaranteed that I'm right? Because I just don't have enough collateral there. So the more collateral
[05:01] that you tie up, the lower your loan to value, the more volatility in Bitcoin's happening. If you've got a very high loan to value, you basically can't have before getting liquidated. So if I'm borrowing $5 at a 50% LTV, I tie up 10.
[05:19] I can change this, though. So let's go to a 40% loan to value. And you'll notice that the $5 is the same. I'm just tying up more collateral there because the loan to the value of my Bitcoin, the percentage is lower even
[05:33] though I'm borrowing the same $5. If I want to increase the loan to value, again, I keep the exact same loan amount, $5, but we're going to go 60% loan to value. That just means that we're tying up less Bitcoin. The only
[05:47] difference here is the volatility that you can handle in the Bitcoin price. The main thing we want to try and avoid is a liquidation. you pay liquidation fees bit of a mess, right? So, we definitely don't want that happening. Once you're
[06:00] borrow and the loan to value, you can go ahead and take the loan. So, I've just pressed LTV again here. You can see the liquidation price for me for this loan is around $37,000. So, if Bitcoin fell to that exchange
[06:12] Bitcoin would be sold and I'd be liquidated. So, I've got plenty of loan, no problem. So, what we're going to do is figure out $5. This is what rate. We're going to collateralize that with Bitcoin review loan. Everything is
[06:28] good here. Down at the bottom, you need to press borrow now. You can see that they are going to charge you a 2% fee. They go over to a DeFi uh platform known and affect this for you. So, press borrow now. That will take a few
[06:41] seconds. And once that's done, uh you will tie up the Bitcoin and you will have the USDC loan in your account. That took around 5 seconds to process the loan. So, pretty quick. And you can now see I've got $5. That's what I borrowed.
[06:54] want with that. I can spend it on the Coinbase card. I can switch it into my local fiat currency and withdraw it to my bank account. It's my property. But liability that I have to pay off and the Bitcoin there which is tied up um to
[07:09] make sure that I do pay it off in the future if anything bad happens. So, we two things you can do here. You can add more collateral, you can borrow more money against it, or you can start to pay down and pay off. So the first
[07:22] option here is to increase borrowing power. If we click that, this is just adding more crypto into the platform to borrow against in the future if you want to do that. So it's just going to give you the option to put more Bitcoin or
[07:34] ETH or other assets in. Obviously, if the price of your assets is starting to some more assets in there to make sure you don't get liquidated. The other way is we can manage or borrow more. So let's go to borrow more first.
[07:48] Notice that my loan to value currently is 51%. That's going to change dependent on the Bitcoin price. My loan stays the same, but the value of my collateral is that I want to borrow more. So, my
[08:00] current LTV is 50.95%. Let's say that I borrow another $2 here. Notice how my LTV will now go up. My collateral value is the same, but I'm borrowing more dollars against it. So, that will increase my LTV to 72%. That's way too
[08:14] high. So you can do that cuz it's below the 75 threshold, but you're going to be putting yourself in trouble for sure. So if you want to borrow more USD, you can do and you're not adding any more collateral. What you can also do is just
[08:27] add more Bitcoin so you have more value and borrow more dollars against it if you want. So again, you can just figure out what your loan to value is overall you put in. The other side is manage. So we'll click this. It's going to tell me
[08:40] that my current loan health is totally fine. It's nowhere near the 86% liquidation threshold. And as we come down, this is my interest rate here. You Again, I can add more collateral. That will reduce my loan to value. I can
[08:54] increase my loan to value without taking any more dollars or less dollars. You that's how you manage everything, right? You can essentially take more dollar loans against the same or you can put more Bitcoin in to reduce the loan. And
[09:08] of course, you can also repay the loan at any point as well. I'll show you how you've done that, you can get all of your assets back as well. So, in the main borrow page, come down here, press manage on the lefth hand side. Notice at
[09:23] the bottom, we have this popup to repay. So, I'll press repay. And we need to pay back the loan. Now, notice that I have a USDC loan, which means that I need to pay back that loan with USDC. And I also need to pay for
[09:37] the interest if there is any with USDC as well. If you don't have enough USDC in your account, you can simply take other assets in your account and trade them into USDC to, you know, in order to pay back the loan. This is how we're
[09:51] going to do it with USDC. So, I want to repay full amount here like this. I've got $8 in my account of USDC. So, that's absolutely fine. I'll pay back the loan. I'll pay the fees. I'll pay any interest that's accured and I can pay that back.
[10:05] So, I'm going to review the payment. We're going to pay all of the USDC back. That's fine. Our loan to value will go down to zero. Down at the bottom, you can see pay off. So, press that. That will go through into the D5 protocol.
[10:18] obviously need that USDC because that's back. And then once that's done, my Bitcoin will be uh given back to me as that took a few seconds to go through. And you can now see I don't have any
[10:31] USDC borrowers on the platform. on the Bitcoin is now my property. Again, I'll down in the description and some deposit and trading bonuses to the exchanges I I'm James MZ G. for watching and I'll see you in the next