Where to Park your $PLS? (Liquid Loans Is Launching SOON!)

“The only people who get rich in crypto are founders and holders.”

Well, if you’re like most people, you’re a holder, not a founder.

So this begs the question, “What do you do with your PLS while holding?”

Luckily, Liquid Loans is launching very soon, and everybody will have a place to park their $PLS while they hold for the long run.

The Problem

Although crypto moves relatively quickly, most users find themselves getting bored during bear markets and sideways action.

This leads them to potentially getting out of the market all together, chasing pump and dumps, or trying to find yield on risky dApps or via centralized third parties. 

Let’s use LP as an example.

Even though liquidity providing is an attractive way to earn yield for many users, there is always the risk of impermanent loss. 

For example, if you LP on the PLS:eUSDC pair, and the price of PLS doubles, you will be left with only eUSDC. 

Therefore, you have effectively lost your PLS bag and will have to buy back higher. 

The problem is that long-term crypto holders need a place to park their $PLS and earn yield without the risk of losing their bag.

The Solution

The Liquid Loans protocol provides long-term $PLS holders the option to park their coins in a vault.

As a result, they can mint USDL which is a fully-backed, decentralized stablecoin generated by an immutable, admin key free protocol. 

The minted USDL is a source of liquidity which can be used to generate yield across the PulseChain ecosystem. 

Users can earn yield via the Stability Pool or providing liquidity on various decentralized exchanges such as PulseX.

Considerations

Users of Liquid Loans must understand and manage the risks of collateralizing PLS and minting USDL.

There are two ways in which the Stability Providers can take your PLS from you.

1. Liquidations. If your vault falls below 110% collateral ratio, you will likely be liquidated and lose your PLS (but you keep your USDL). Although this sounds scary, it is extremely avoidable. Simply set a high collateral level initially, and monitor your vault if PLS is dipping in price.
2. Redemptions. When a user redeems USDL for PLS, they take the PLS from the vault with the lowest collateral level. To avoid this, make sure you are not the lowest collateralized vault. If you ratio is above 150%, you most likely will not be that wallet address.