Using LOXETH

What you can do with it

• Hold it. The rate rises whether or not you do anything else.
• Use it as collateral. Lending markets on Robinhood Chain accept it, so a position can be borrowed against without selling the underlying.
• Provide liquidity. Pair it against ETH or the settlement token.
• Vote with it. Governance participation does not require unstaking.

Three things to check before depositing

1. Is the venue using the contract rate or a market rate? A venue that values LOXETH at the contract rate will treat a market discount as an opportunity to liquidate you cheaply.
2. What is the liquidation threshold? A receipt that earns is still a receipt; it is not worth exactly one ETH, and a thin market can move it further than expected.
3. Is the market deep enough for your size? Check the position against the pool's depth, not against the quoted price.

Composability is the point

The reason to prefer a receipt over a rebasing balance is that other contracts can reason about it without special support. That is what makes it usable as collateral, in a pool, or in a vault — and it is why the exchange rate, not your balance, is what moves.