SHIB has been introduced to the platform of Binance, the largest cryptocurrency exchange in the world by trading volume, as a collateral asset for flexible loans.
Shiba Inu (SHIB), along other well-known cryptocurrencies including Compound (COMP), IOTA, iExec (RLC), Holo (HOT), Enjin Coin (ENJ), THETA, and IOST, have been added to the leading’s list of collateral assets.
A sort of lending business called Binance Flexible lending allows customers to utilise their cryptocurrency holdings as collateral to get loans without having to adhere to a predetermined payback schedule.
This indicates that consumers who own cryptocurrencies in their Simple Earn Flexible Products, an investment product provided by Binance, can obtain a loan using those assets.
Contrary to conventional loan services, Binance’s flexible loan does not require borrowers to pay back their debts within a predetermined amount of time. Additionally, based on the annual percentage rate (APR), it offers prizes in real-time.
The loan may be liquidated to partially or entirely repay the loan if the value of the collateral decreases or the loan value increases, respectively, and the loan-to-value (LTV) ratio climbs beyond a certain level.
Although Binance’s action highlights Shiba Inu favourably, investors need to exercise caution. Borrowing against unstable crypto lifeboats, like SHIB, might cause risk storms due to probable value tidal waves in the perilous crypto ocean. If the value of the crypto asset declines considerably, this can result in margin calls or possibly the loss of collateral.
