How to spend crypto without selling it
You can spend against your crypto by borrowing a stablecoin instead of selling. Here's how borrowing against collateral works and the risks.
Selling crypto to spend it means giving up your position. An alternative is to borrow a stablecoin against your crypto as collateral: you keep your asset and spend the borrowed funds.
The trade-off
Borrowing keeps your exposure to the collateral, but it is over-collateralized and carries liquidation risk: if your collateral's value falls far enough relative to your loan, it can be sold to repay the debt. You also pay a variable borrow rate over time.
How Skope does it
Skope borrows USDC against your crypto on Morpho (a lending protocol on Base) and turns the borrowed USDC into a virtual card, keeping your collateral in your own position the whole time.
Frequently asked questions
- Is borrowing against crypto taxable?
- Tax treatment varies by country and situation. This is not tax advice; consult a qualified professional for your circumstances.
- What happens if my collateral drops in value?
- Your position can be liquidated if it crosses the market's liquidation threshold. Skope sizes loans conservatively, but liquidation risk can't be eliminated.
Borrowing is over-collateralized and carries risk: if your collateral's value falls, your position can be liquidated. Rates shown are variable and update with the market. Skope is non-custodial and never holds your funds. This page is for general information only and is not financial, investment, tax, or legal advice.