Welcome, DeFi enthusiasts! And let’s dive directly into it.
What’s the best thing about the Radar Borrow feature, you ask?
Well, it couldn’t be easier; it allows you to take out loans with 0% interest rate and earn APY rewards at the same time
What makes this possible, you may wonder?
and the answer is the minor entry and exit fees
Essentially, when you take out a loan of $1000 for example, your debt will be $1000 + 1% entry fee which is $10. Then when you want to pay back the loan and unlock your collateral, you have to pay an additional 0,5% which is $5 in our case.
Therefore, instead of paying the recurring 5 to 10% interest, which adds to about $100 on a short-term loan of $1000, you just pay a one-time fee of $15.
That sounds like one of the best deals ever, right?
Well, don’t forget that at the same time, the collateral you deposited keeps earning you crypto rewards depending on the borrowing pool you chose
What are the options?
Let’s have a look for ourselves and take out a loan
First, you go to app.radar.global
Connect your wallet by clicking on the button in the top right corner as such and heading to the Borrow USDR page.
Then to choose a pool, simply consult all the stats or directly go for the one that offers the best conditions, such as high APY and max collateralization.
Example: 5,000 USDR loan
In this example, we choose to deposit USDT because of the high APY of 8% and lower risk.
The first time we need to approve the asset we want to deposit as collateral and confirm
Then we input the amount we want to deposit.
Here we’ll do $10,000
This deposit will bring you $800 every year at the current APY of 8%
Now we can use the risk slider to input the amount of USDR that we want to borrow.
The percentage shown reflects the collateralization ratio. This means the amount of collateral used to borrow against.
50% collateralization ratio would, in this case allow us to borrow $5,000.
Getting the loan
Once you have decided all amounts are in line with what you wish, you can see a summary, including the cost of the loan.
Because we want to borrow $5,000, our entry fee will be 1% of that, so $50.
We click sign and borrow, confirm the transaction, and get our USDR directly sent to our wallet.
At this moment, You can officially start spending your USDR in any way you wish. To convert it to a different traditional stablecoin, simply hop onto the curve platform and buy USDT, DAI, or USDC with your USDR.
Also, you can deposit it on Curve.fi to get USDR3CRV LP tokens that can be used to farm even higher rewards on the Radar platform.
Getting liquidated shouldn’t be the case for USDT, but we always recommend being careful and monitoring your open positions and risk exposure.
The aftermath & the potential 500k profit
Now let’s fast forward one year and suppose we want to repay the loan.
We earned $800 APY and whatever profit or benefit that came from the 5k borrowed, which for all we know, could’ve been a 100x lucky investment that produced $500,000.
To summarize, the total cost was 1,5% :
1% entry fee + 0,5 repay fee totaled $75, so our profit was anywhere from 800-75= $725 up to 500k or more.
Visit the Radar platform now to get your 0% interest loan, learn more about USDR and Radar using the docs and link in the description or watch our next video about how to multiply your exposure up to 18x.