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What does borrowing coins mean (How to repay borrowed coins)

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What does borrowing coins mean? Borrowing coins, known as \”aave\” in English, ge

What does borrowing coins mean (How to repay borrowed coins)

What does borrowing coins mean? Borrowing coins, known as “aave” in English, generally refers to a protocol or platform for lending and borrowing. Its purpose is to provide loans to users with assets such as US dollars or euros as collateral or borrow other digital currencies as collateral. This model allows anyone to lend and borrow money and funds using various cryptocurrencies. If a person wants to earn interest through lending, the project will take a portion of their money and use it to repay the debt.

Generally, the borrower’s principal is used to pay interest and other fees, but if a digital currency is borrowed, it can also be returned to the borrower. However, it should be noted that lending does not mean that a specific entity can store these tokens in a specific exchange, but they are issued by the trading platform. Therefore, both the borrower and the lender have the right to receive corresponding profits. Inappropriately, “aave” refers to a decentralized finance (DeFi) financial intermediary in which the logic is similar to the loan process of a bank, and funds can be received regularly as long as they are willing.

How to repay borrowed coins

Repaying borrowed coins means lending your coins to someone else. In general, the borrower will repay the loan principal (interest), and the debt (interest) needs to be repaid when borrowing. Usually, there are three ways during the borrowing process: first, deposit the digital assets into the exchange account or transfer them to the platform, then deposit fiat currency into the designated account for mortgage loans; then, if the user replenishes tens of thousands of Bitcoins into the contract address of the platform and obtains funds through the transaction, the system will automatically recover these Bitcoins, and the borrowing behavior of the user will be temporarily suspended.

For ordinary people, borrowing money or borrowing virtual currency in other ways is unsafe and risky. Due to many users not being able to receive funds in a timely manner without making any reserve fund operations, some people may encounter situations such as increasing losses or being unable to repay the owed amount, which may lead to situations similar to “running away”. How to recover after “running away”? Currently, most investors believe that refunds and payments are two different choices because this solution has certain risks and complexities.

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