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As I understand, they stepped in to bridge the bid/ask spread and act as a temporary market maker to solve a liquidity crunch. Can someone more knowledgeable te
by 0xcafecafe 7y ago
As I understand, they stepped in to bridge the bid/ask spread and act as a temporary market maker to solve a liquidity crunch. Can someone more knowledgeable tell me why the bid ask spread is so wide to begin with?
- rjbwork 7y agoProbably because the people wanting to loan the money don't think the people wanting to borrow the money are going to be able to pay it back, so they're charging larger interest rates to compensate them for the risk. That's really all the interest rate is.