CariBouFarms on Nostr: Bitcoin as collateral The moral, ethical and rational case for borrowing against our ...

Bitcoin as collateral

The moral, ethical and rational case for borrowing against our #bitcoin

Why we do it

Best practices

Standards

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Why we do it:

Fundamentally it’s a moral and ethical choice

We refuse to fund state incompetence and abuse

If we sell sats for $cad, we have a capital gain to declare

While declaring is a choice, we refuse to offer the state any reason to target us

If we need to access fiat liquidity to cover expenses or equipment purchases, we borrow it by posting our bitcoin as collateral

We expense the interest, we never sell the bitcoin and we never incur a capital gain

This only makes sense because bitcoin is appreciating far faster than our interest expense on the loans

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Best practices:

We only post a small portion of our farm treasury as collateral

We never borrow more than we need

We aim for LTV of 25% or less in order to remain conservative and capable of withstanding major drawdowns without needing to re-collateralize

We only trust our bitcoin with lenders that pass a rigorous vetting process and meet our high lending standards

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Lending standards:

No rehypothecation

Transparent UTXO monitoring

Perpetual loan rollover

48hr collateral withdrawal with transparent fees

Insured balances

Transparent custody protocols

Deposits and payments to/from Canadian bank via wire

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Lending against your bitcoin is not without risks but when done intelligently and rationally, it can be a powerful tool to fund farm operations, never sell your treasury and defund the state

Questions? DM us

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