How does lending digital assets involve risks?

3 answers

• Jan 14, 2022 · 3 years ago
  Lending digital assets involves risks such as counterparty risk, where the borrower may default on the loan and fail to return the assets. Additionally, there is the risk of price volatility, as the value of the assets may change during the loan period. It's important to carefully assess the borrower's creditworthiness and set appropriate loan terms to mitigate these risks.
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• Jan 14, 2022 · 3 years ago
  When lending digital assets, there is always the risk of losing your assets if the borrower defaults. It's crucial to choose a reputable lending platform and thoroughly research the borrower's background before entering into a lending agreement. Diversifying your lending portfolio can also help spread the risk and minimize potential losses.
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• Jan 14, 2022 · 3 years ago
  Lending digital assets can involve risks, but platforms like BYDFi aim to mitigate these risks by implementing robust risk management systems. BYDFi conducts thorough due diligence on borrowers and offers collateralized lending options to reduce the risk of default. However, it's important to note that lending always carries some level of risk, and it's essential to carefully consider your risk tolerance and investment goals before participating in lending activities.
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