Binance, the world's largest cryptocurrency exchange by trading volume, has added SHIB as a collateral asset for flexible loans on its platform.
In addition to Shiba Inu (SHIB), the leading has expanded its list of collateral assets to include other notable cryptocurrencies such as Compound (COMP), IOTA, iExec (RLC), Holo (HOT), Enjin Coin (ENJ), THETA, and IOST.
Binance Flexible Loan is a type of loan service that doesn't have a set repayment term and allows users to put up their cryptocurrencies as collateral to secure loans.
This means users can get a loan using cryptocurrencies they have in their Simple Earn Flexible Products, an investment product offered by Binance.
Unlike other loan services, Binance's flexible loan doesn't force users to repay their loans within a fixed time frame. Additionally, it provides real-time rewards based on the annual percentage rate (APR).
If the value of the collateral falls or the loan value rises, thus causing the loan-to-value (LTV) ratio to exceed a certain threshold, the loan may be liquidated to repay the loan partially or fully.
While Binance's move casts a positive spotlight on Shiba Inu, investors must tread carefully. The crypto ocean can be treacherous, and borrowing against volatile crypto lifeboats, like SHIB, could stir up storms of risk due to potential tidal waves in value. This could potentially lead to margin calls or even loss of collateral if the value of the crypto asset falls significantly.