Maximize Memecoin Liquidity: Use $APU for Time-Based Cash Advances on Teller
Teller loans provide an innovative solution for navigating defi markets by offering time-based, not oracle-based, loans. This means the only way a borrower can be liquidated is if they fail to pay or renew the loan within the specified timeframe. Memecoins, such as $APU, may experience high volatility. Teller’s approach allows for liquidity without selling off valuable memecoins. By using $APU as collateral for time-based cash advances on Teller, borrowers can maintain their holdings while securing necessary liquidity.
Unlock a New Utility for $APU on Teller
Memecoins are often viewed as cultural tokens lacking practical utility. Instead of selling, traders can leverage Teller to use $APU as collateral for time-based DeFi cash advance loans. This method allows borrowers to access instant liquidity while keeping their memecoins secured for future market momentum.
$APU Memecoin Becomes New Favorite for Liquidity
In recent weeks, the market saw a significant dip and liquidation event, causing many tokens, especially memecoins, to tank as traders searched for liquidity to cover losses. This doesn't have to be the case anymore! In June, Teller saw memecoin Apu Apustaja (ticker $APU) gain traction as collateral on the platform.
On June 7th, $APU was introduced as collateral for Teller DeFi cash advances. Within a few days, $APU was actively being used as collateral on Teller, with the largest loan amounting to 422.11M $APU for 68.3k USDC over a 3-day duration. In this scenario, the lender had a bullish outlook on $APU but recognized the potential for a short-term bearish trend. If the borrower was unable to repay the loan on time, the lender would acquire a substantial amount of $APU tokens, with the potential for a future bullish uptrend in the token's value.
During the volatile market activity last month there was an uptick in the use of $APU as collateral. To date there has been $796.57K USDC loan volume for cash advances using $APU as collateral. With flexible terms, time-based repayment, and no price oracle, this is an easy solution to gain liquidity without dumping memecoin bags. Similar techniques have been employed with other high-risk, high-reward crypto coins, involving over $1 million worth of assets.
Benefits of Using $APU as Collateral
Borrowers using $APU as collateral can avoid selling their tokens during market downturns, thereby limiting price volatility. They can roll over loans to withstand market dips, despite potentially higher APY compared to more stable assets. This strategy allows them to maintain their positions and possibly buy back at lower prices, increasing their token holdings without affecting the liquidity pool.
For lenders, overcollateralized loans offer protection against decreases in collateral value. Although risky, these loans provide high yields, making them attractive for those willing to navigate the volatility of memecoins like $APU. This approach represents the next generation of DeFi lending, where both borrowers and lenders can mutually benefit from innovative, peer-to-peer loans on Teller.
Using $APU as collateral for time-based loans on Teller exemplifies how memecoins can be leveraged for liquidity without selling, preserving their value and potential for future gains.
How to Use $APU as Collateral
Teller allows users to obtain short-term loans secured by their crypto holdings. These short-term loans are best thought of as DeFi cash advances rather than traditional loans. Here’s how it works:
Step 1: Connect a Compatible Wallet
Connect a cryptocurrency wallet to the Teller platform using supported wallets like MetaMask, Coinbase Wallet, or others that support Web3 connections.
Step 2: Review Tokens with Available Loan Offers
View the tokens in the wallet that are eligible for loan offers. The Teller platform will display the available loan opportunities based on the tokens held. This will directly show users what memecoins can be borrowed against. If a memecoin does not have an active loan listing, the user can make an offer to be filled by a lender by following the platform’s steps.
Step 3: Examine Loan Offers
Review the available loan offers for eligible memecoins. Consider the available offers based on the following metrics:
Loan-to-Value Ratio (LTV): The percentage of the token's value that can be borrowed
Annual Percentage Rate (APR): The interest rate applied to the loan
Duration: The length of time the loan is active
Step 4: Select and Execute a Loan
Choose a preferred loan offer and initiate the loan process in a single transaction. The transaction will move the chosen collateral (tokens) into an on-chain escrow smart contract. The loan capital is then transferred directly to the wallet.
Step 5: Repayment
At the end of the loan duration, repay the loan along with any applicable fees to release the collateral from the escrow smart contract.