Bitcoin Poker and How to Fund it With DeFi

The best Bitcoin poker games are those you win, right? But it takes time to get the skills honed enough to win … especially when you can’t read your opponent and find their “tell” because the game is on a Bitcoin poker site.

One of the ways to get better through practice is by not stressing a lot. Having a clear and level head goes a long way towards seeing the right cards to play at the right time.

But how can you reduce your stress when you’re betting your hard-earned money?

One way could be by bankrolling your betting book with DeFi.

Decentralized Finance Interest Earned

DeFi is the hot new innovation in the cryptocurrency space. It uses smart contracts to cut out the middleman when someone wants to borrow or lend money to someone else.

DeFi also allows you to earn money by locking up your cryptocurrencies. The DeFi platform will then use your cryptocurrencies as collateral to fund someone else who wants to borrow money for various expenses.

You can earn an APR of anywhere from 3% to 20% or more.

One idea is to then use that interest you’re earning to bankroll your Bitcoin Poker games. Instead of risking money that you worked 9-to-5 to earn — and which might be seen as risky by your spouse or friends — you can instead put the money from the interest earned by your crypto assets.

These types of possibilities are highlighted by Binance Academy:

“Decentralized finance brings numerous benefits when compared to traditional financial services. Through the use of smart contracts and distributed systems, deploying a financial application or product becomes much less complex and secure. For instance, many dApps are being developed on top of the Ethereum blockchain, which provides reduced operational costs and lower entry barriers.”

DeFi Borrowing

One of the ways to keep honing your Poker skills is to keep reinvesting your winnings into more games. But what if you’ve thought about cashing out to pay for other things?

If you cash out your winnings, you’ll incur fees for transferring (paid to the crypto miners), possibly taxes, and other fees. But if you keep the winnings on the site and use them to win more games — you’ll improve your skills. Or, who knows, you might lose everything. Your choice.

Nevertheless, if the choice is to keep the winnings in the pot for more or bigger games — what can you do to pay for other things in fiat?

DeFi has the option to borrow funds. You use cryptocurrency as collateral to secure the loan and get paid in USD, Euro, or other major fiat currencies depending on where you live and which fiat currency you may need.

The rates to borrow start from 5% and go up depending on the term length of the loan, how much loan-to-value ratio you’ll be putting in, and a few other factors that depend on your country of residence.

DeFi Basics

If these ideas are at all interesting then there are a few basics worth covering before you head off to do deeper research.

1. Earning interest

To earn interest you’ll need to put up cryptocurrency and lock them up. Some DeFi platforms are very flexible with your lockup periods and will let you deposit and withdraw at any time. Other DeFi platforms will require a lockup that cannot be broken and will last a month to a year.

Make sure you understand the lockup period terms before you decide to earn interest from your crypto. That way you’ll be free to take out your funds when you want.

2. Borrowing funds

Borrowing funds will always require you to put some of your cryptocurrency up as collateral. This locks up your crypto and it does not get unlocked until you pay off the loan — or the value of the collateral falls close to or below your loan amount.

When your collateral falls close to the amount you borrowed — the DeFi platform may “margin call” your collateral and sell it on the open market in order to cover your loan.

This is a safety feature designed so you don’t need to submit your credit report to qualify for the loan — since the DeFi platform doesn’t need to take your word for your ability to repay but will instead have real collateral to sell in case of default or price volatility.

If you are okay with your loan being paid off through margin call, then there’s nothing to worry about. Your loan will simply be paid off sooner than you thought.

However, if you’re worried about losing your crypto to the market and its sudden price fluctuations — then you can protect yourself by having more crypto waiting on the sidelines.

When the DeFi platforms emails you to say “hey your loan value is reaching close to a margin call,” then you should have the chance to deposit more cryptocurrency in order to raise the value of your collateral and prevent getting margin called.

These are the basics of DeFi and how they could help you play poker (with Bitcoin) better. Think it through and, if interested, get on Google for deeper research.

Thanks for reading and best of luck on the card draws.