Unit 2 · Level 3 · Lending & borrowing
Why borrow at all?
Locking €150 to borrow €100 sounds absurd until you see why people do it. Reason one is leverage: borrow stablecoins against your ETH, buy more ETH. Reason two is liquidity: spend today without selling coins you want to keep. Reason three is shorting: borrow a token, sell it, and profit if you can rebuy it cheaper. All three have the same fine print: interest ticking and a liquidation line waiting.
Free to play. No ads, no token, no account needed to start.
What you get asked
Why would someone borrow stablecoins against their ETH instead of just selling the ETH?
They keep the upside if ETH rises, but they've added interest costs and liquidation risk to get it. Keeping exposure is a bet, not a free lunch.
How do you short a token using a lending protocol?
Borrow, sell, rebuy cheaper, repay, pocket the difference. If the price rises instead, your debt grows in euro terms. Shorts have unlimited downside, as the Trading course warns.
Match each reason to borrow with what it really is:
Every borrow is one of these three, and every one of them pays rent for the privilege: interest.
'Borrow against your coins, never sell' sounds free until a price drop triggers a ___.
The influencer version skips the ending: a deep enough dip sells your coins for you, at the worst price, plus a penalty.
The 'borrow instead of selling, it's tax-free!' narrative. What's the honest version?
It's true that borrowing isn't a sale, but it swaps a known tax bill for market risk, interest, and a liquidation line. And tax treatment differs by country, so never take a meme as advice. 🐜
The rest of this unit
Loans with no credit check: just collateral, math, and a liquidation bot watching.