Hi there!
I’m a total noob on Terra and DeFi, and I’m finding Terra ecosystem so great and exciting.
I was reading about Alchemix and I landed on this thread, trying to compare it with Terra possibilities. And now I read that Kinetic Money is about to launch on Terra, to support the same idea
BUT, did I understand it right? I’ve got a couple of questions:
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Is the APY on the deposit fixed and guaranteed? Anyone can explain how this can be guaranteed? I mean, is it always 100% guaranteed that the loan is gonna self pay in ~12 months?
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So the way Alchemix/Kinetic is expected to work, would the following be possible?
- You deposit/lock 1.000 UST on the protocol as collateral
- Then you get a loan of 500 UST
- You take the 500 loan and lock it again
- You get a second loan of 250
- Lock it again, and get a loan of 125
- …Repeat until ~0 (or whatever amount is the minimum for the collateral)
Then, you wait 1 year for all your loans to self-pay, and everything you locked becomes available, so you end up with $1.000 + 500 + 250 + 125 + 62.5 + 31.25 + … = Something near $2.000
Am I missing something? Could that be possible to almost double your money in 1 year, doing nothing, with guarantee and no risk?
Please, help me understand it
Thx!