Post Menu and Details.
- Dogecoin loan explained
- Why use Dogecoin as a loan collateral
- How does a dogecoin loan work?
- A Bit of Background on Dogecoin
- What is Dogecoin?
- How Does Dogecoin Work?
Reading time: ~4 minutes
Crypto-backed loans are a trend that has become very popular lately. Just like you can use your house, car, or another asset as collateral to help secure a loan, you can also use your crypto coins for the same purpose. There are thousands of cryptocurrencies out there but only a few can be used to get a crypto-backed loan.
One of those cryptocurrencies is Dogecoin. For a crypto coin that was introduced to just poke fun at Bitcoin, it is astounding how Dogecoin has risen to popularity and is currently sitting among the top five cryptocurrencies in terms of market capitalization. Now you can borrow against Dogecoin as well as trade it through various crypto exchanges to earn profit.
Doge lending, just like with any other cryptocurrency, is risky because of the price volatility. Despite this, many investors still choose to apply for a Dogecoin loan because it is simple to do so and does not require any credit checks. In this article, we look in detail at what a dogecoin loan is.
Dogecoin loan explained
A Dogecoin loan is a secured loan that you use Dogecoin as collateral for instead of other assets that you own. In this scenario, you offer your Dogecoin assets to a lender and you get a cash loan which you will be required to pay off within a specified period at an agreed rate. If you do not honor your required repayments, the Dogecoin assets that you used as collateral will be liquidated for cash.
There are several crypto lenders out there you can choose but each charges its own lending rates. YouHodler is one of the best Dogecoin lending platforms as it charges the best rates. YouHodler also employs high-grade safety measures to ensure your deposited assets are kept safe. The beauty of Doge lending is that you stand to benefit if there is a rise in the value of your assets during the loan period.
Why use Dogecoin as a loan collateral
Dogecoin is one of the few cryptocurrencies that have performed exceptionally well in the market lately. While cash needs might come any time, fully liquidating their assets for cash does not sit well with many investors as they remain optimistic about a future price rise. In order to sort out the immediate cash needs, investors opt to borrow against Dogecoin as this allows them to retain ownership of their assets.
Funds obtained from a Dogecoin loan can then be invested in another business or used to buy different crypto. Dogecoin loans are instant and no credit history checks are required. Interest rates are low as well and the repayment period is flexible.
How does a dogecoin loan work?
The number of crypto buyers is growing every day and many crypto platforms are using this opportunity to present investors with an additional way of making cash. Today you can earn interest on your Dogecoin when you buy and HODL it. The cash used to buy Dogecoin is offered out as loans and in return, the part of the repayment interest is used to pay the investors who HODL their assets.
To get a Dogecoin loan is quite simple. First, you need to deposit Doge to a crypto lending account such as YouHodler. Check out the lending plans available and choose one that is most suitable for you. Once you select a plan, your loan will be instantly processed, and you will receive your funds which you can withdraw to your account or use to buy another crypto.
A Bit of Background on Dogecoin
Dogecoins are cryptocurrencies, like Bitcoin and Ethereum, though they are quite different from each other. Originally named after an old meme, Dogecoin was at least in part a joke targeted at crypto enthusiasts. Although Dogecoin has an unusual origin story, its popularity has exploded in 2021-it is currently the fifth-largest cryptocurrency by market capitalization.
What is Dogecoin?
Dogecoin was created by Billy Marcus and Jackson Palmer in late 2013. Palmer branded the cryptocurrency’s logo by intentionally misspelling the word “doge” to refer to a Shiba Inu dog at the time.
Pat White, CEO of Bitwave, said that Doge was really poking fun at Bitcoin. A community of enthusiasts brought Dogecoin to the public’s attention by arranging publicity stunts, such as collecting funds to send the Jamaican Bobsleigh team to the 2014 Olympics and sponsoring NASCAR drivers.
Reddit’s WallStreetBets message board provided the catalyst for the GameStop dispute in January 2021, with enthusiastic users promising to propel the currency’s value “to the moon” (before discussion of crypto was banned).
Today, Dogecoin has gained more than 5,000% in value in 2021, and its value continues to rise. Elon Musk calls Dogecoin his favorite cryptocurrency and is one of its biggest boosters. Musk also referred to dogecoin as the “people’s crypto,” and a physical token of the currency was to be planted on the moon.
How Does Dogecoin Work?
As with Bitcoin and Ethereum, Dogecoin runs on blockchain technology. Digital blockchains store all transactions made with a decentralized digital currency using a distributed, secure ledger.
Dogecoin’s blockchain ledger is copied among all of its owners and is continually updated with the latest transactions. Dogecoin uses cryptography to secure its blockchain network, just like other cryptocurrencies do.
The Dogecoin blockchain is used to record transactions by solving complex mathematical equations using computers-called the “proof of work” system. They can then hold or sell Dogecoin in the open market as a result of processing transactions and supporting the blockchain ledger.
Payments and purchases can be made with Dogecoin, but it’s not a very reliable store of value. Dogecoin’s highly inflationary nature is due primarily to the fact that there is no lifetime limit on the number of coins that can be mined – meaning that the cryptocurrency is created to be highly inflationary. Speculative price gains in Dogecoin can be challenging to sustain over time because the blockchain rewards miners by creating millions of new coins globally every day.
Thank you for reading!