7 ms·
Gemini Earn
- ains 6y agoPROGRAM RISKS YOUR AVAILABLE DIGITAL ASSETS WILL LEAVE GEMINI'S CUSTODY, AND YOU ACCEPT THE RISK OF LOSS ASSOCIATED WITH LOAN TRANSACTIONS, UP TO AND INCLUDING TOTAL LOSS OF YOUR AVAILABLE DIGITAL ASSETS. Gemini is not a depository institution, and the Program does not offer a depository account. Participating in the Program may put your Digital Assets at risk. Loans made through the Program are unsecured. You have exposure to Borrower credit risk, and Borrowers are not required to post collateral to you or to Gemini. Transactions in Digital Assets may carry added risk compared to lending of other types of assets because transactions in cryptocurrency are in many cases irreversible. Funds may not be recoverable in the event of errors or fraudulent activity.
- kylebenzle 6y agoAwesome! So I can get a 7% return and all I have to do is trust random strangers with ALL of my money.
- rootsudo 6y agoWhich is..exactly the same when compared to a bank, a brokerage account, or index fund.
- greyface- 6y agoA bank, brokerage account, or index fund would have FDIC or SIPC insurance coverage.
- rootsudo 6y agoIt does not protect if the asset invested in goes down in value. FDIC is protection against the bank being insolvent. SIPC does not protect customers against losses from the rise and fall in the market value of investments. https://www.sipc.org/for-investors/what-sipc-protects https://www.sipc.org/for-investors/what-sipc-protects
- greyface- 6y agoThere's no disagreement here. FDIC/SIPC protect against insolvency. The context of this discussion is borrower credit risk, i.e., the risk that the borrower becomes insolvent.
- bdcravens 6y agoAren't most of those institutions bound by certain laws and insurance requirements?
- rootsudo 6y agoNot for investments. For regular banking, checking and savings, yes. That's FDIC. It does not protect if the asset invested in goes down in value. FDIC is protection against the bank being insolvent. SIPC does not protect customers against losses from the rise and fall in the market value of investments. https://www.sipc.org/for-investors/what-sipc-protects https://www.sipc.org/for-investors/what-sipc-protects
- jmhyer123 6y agoExcept all of those are insured by the FDIC so there's almost no risk outside of market volatility.
- rootsudo 6y agoWrong. It does not protect if the asset invested in goes down in value. FDIC is protection against the bank being insolvent. SIPC does not protect customers against losses from the rise and fall in the market value of investments. https://www.sipc.org/for-investors/what-sipc-protects https://www.sipc.org/for-investors/what-sipc-protects
- passwordis1234 6y agothose institutions are not lending your money out in uncollateralized loans.
- rootsudo 6y agoYes they are, banks operate on fractional reserve. Banks do signature loans all the time. A popular one is known as a credit card. https://www.investopedia.com/terms/f/fractionalreservebanking.asp https://www.investopedia.com/terms/f/fractionalreservebankin... It does not protect if the asset invested in goes down in value. FDIC is protection against the bank being insolvent. SIPC does not protect customers against losses from the rise and fall in the market value of investments. https://www.sipc.org/for-investors/what-sipc-protects https://www.sipc.org/for-investors/what-sipc-protects
- quickthrowman 6y agoBank accounts are FDIC insured up to $250,000 each. If your broker lends out your stock to short sellers, it will always return your shares, even if the short seller gets margin called and doesn’t have the money to pay back their broker. I’m not sure what you mean by “index fund”, but securities/stocks are protected by SIPC insurance, up to $500,000 per account. You will get your stocks back if a brokerage fails.
- rootsudo 6y agoA bank does not mean bank account, banks offer many different investment vehicles. A savings or checking account is covered by FDIC. If your broker lends out your stock and can not recoup it, then you are also not protected by SIPC. https://www.investopedia.com/terms/f/fractionalreservebanking.asp https://www.investopedia.com/terms/f/fractionalreservebankin...
- JumpCrisscross 6y ago> If your broker lends out your stock and can not recoup it, then you are also not protected by SIPC This is not true. The broker would be in default to you. If that literally pushed the broker under, SIPC would be there to pick up the pieces.
- vmception 6y agoFor anyone using similar programs for years, they are the exact same Nexo Blockfi Crypto.com And Celsius All have the same inherent limitations for insurance coverage and clauses At least the autonomous onchain services let you purchase smart contract insurance to reimburse community accepted unexpected behaviors like overflows.
- lykr0n 6y agoInteresting development, and nice to see a growing ecosystem of useful cryoto products. BlockFi (use my Referral Code 42040b1c) has better rates, but this Gemini Earn has a bunch of "alt coins" not on BlockFi. BlockFi gives you 6% on BTC, and 8.6% on USDC/GUSD. I have a few grand in BlockFi, and it's nice to get ~30/40 a month from interest. This would be awesome if you want to hold say Filecoin, but also want to earn interest.
- vmception 6y agoYeah my favorite thing about CeFi and DeFi is that there is so much room to easily compete by contributing just a different combination of assets, almost infinite permutations possible Each service offers a few assets, gets comfortable and extremely hard to contact by any other token’s community and loses business to the next service that does offer the token du jour for lending and borrowing. Total boom town
- bdcravens 6y agoThis is just crypto p2p lending, which is hardly new. Fraud is rampant in this space.
- vmception 6y agoNobody said it was new. Gemini is announcing they are offering it.
- Acrobatic_Road 6y agoit's not, this is either overcollateralized lending like compound finance or dharma, or it's flash lending. You don't have to worry about fraud. edit: this line sheds some light: "Gemini is partnering with vetted and accredited third party institutional-grade borrowers including Genesis Capital". So they are lending your money to accredited parties, not random people on the internet.
- px43 6y agoActual DeFi is great. It's non-custodial, on chain, and mostly easy to verify just by reading the code. Any Ethereum based asset makes this trivial to implement, and for the most part, the DeFi ecosystem on Ethereum is incredibly mature. BTC lending on the other hand (which Gemini is offering) must be custodial, so there's pretty significant risk of loss if Gemini gets hacked, seized, or otherwise looted. To answer someone else's question on this thread, over-collateralized lending solves the "I want to buy Ethereum but all I have is Ethereum" problem. Most people use it at a really simple mechanism for adjustable leverage, letting them increase their risk exposure without losing custody of their assets.
- jkhdigital 6y agoProbably better to call it “self-custodial” since you still have to maintain security of the keys yourself. But yeah, there’s no additional custodian required, unlike (say) publicly traded securities.
- kgc 6y agoI guess they're just collecting a spread on the yield offered by Genesis then. Why not just go with Genesis directly?
- rawrmaan 6y agoPoor interest rates compared to other more established competitors like https://celsius.network/ https://celsius.network/
- comboy 6y agoThis "established competitor" (which I have never heard of, but I'm not very up to date) has domain registered on 2020-06-08 ... Many popular exchanges have been offering staking for years.
- deleted 6y ago[deleted]
- Fast_Sasquatch 6y agoUnavailable past login as far as I can tell...
- woodruffw 6y agoCan someone more familiar with these types of programs (whether Gemini's or another's) explain how these companies evaluate the trustworthiness of their borrowers? Given that these loans appear to be unsecured, the last thing I would want is for Gemini to approve someone with my money and have them skip town, metaphorically speaking.
- piercebot 6y agoI may have missed this on the page; is the interest paid in USD or in the asset you're lending? The examples only show USD. It says interest compounds daily; keep in mind (US Residents) that every day is another line item you need to report to the IRS.
- dna_polymerase 6y agoThe coins with staking rewards do not reward in USD. So no matter if you get paid in USD or the coin, its worth will depend on the exchange rate at the time of payout.
- piercebot 6y agoWhat's the market for borrowers? What are people borrowing cryptocurrency for? With fiat interest rates at record lows, why not borrow fiat instead and use it to buy crypto? Surely not all of the demand is coming from the unbanked? EDIT: My question was answered while I was typing it up :) https://news.ycombinator.com/item?id=25996264 https://news.ycombinator.com/item?id=25996264
- dastx 6y ago> With fiat interest rates at record lows, why not borrow fiat instead and use it to buy crypto? I just had a look and compared Gemini's calculator of lending, compared to Zopa's (UK p2p lender) calculator and, for a £10k loan, you'd be paying ~£500 in interest at Zopa (~14% APR), where Gemini claims you'll be getting $1.7k in interest (based on $11k lent and Filecoin's ~7% interest). My guess is Gemini's calculator is either purposefully or accidentally broken, or I'm missing something.
- jkhdigital 6y agoBecause nobody will lend you fiat to buy crypto? Interest rates for high-quality collateral (real estate, established business income, legalized theft of your citizens’ assets via taxation, etc.) are at record lows but credit cards for marginal borrowers still charge 20%+.
- formalsystem 6y agoAm I missing something about crypto lending? Your deposit can't be FDIC insured and if borrowers are defaulting that means your deposit disappears. You can't bailout a crypto bank by printing crypto. The appreciation of Bitcoin has been so staggering that it also makes getting interest back on your deposits seem rather outdated.
- meowkit 6y agoYou’re not. The ToS for Gemini Earn states exactly that you risk losing your deposit. You earn interest on top of the underlying appreciation. Doesn’t seem outdated to me.
- jcpham2 6y agoBitcoin banks have been tried and failed, I should know the US department of Justice sent me victim notification emails about it for years. Take it from someone who has operated in this space long enough to beware of interest rates on crypto, the money has to come from somewhere to cover the vig Fractional reserve banking is the thing that is to be avoided and ultimately fails. Ymmv. I am not a financial advisor blah blah
- ac29 6y agoAs with anything in crypto, there is significant counterparty risk.
- Sektor 6y agoLiterally still waiting on verification from Gemini after more than 2 months. I've since opened an account with BlockFi (was verified in 24hrs) an account with Binance (same again) and bought crypo from binance and moved it to blockfi for interest gain. Gemini can suck a fat one.
- jtbayly 6y agoIf I am earning interest on Bitcoin I put in there, am I also gaining/losing the value change of Bitcoin during that time?
- jtbayly 6y agoOk, you can, but I still don’t understand how. “ Unlike other opportunities to earn interest on your cryptocurrency, you can redeem your cryptocurrency at any time, with no penalties, and receive it at its current market value — plus the interest you’ve earned!”
- deleted 6y ago[deleted]
- deleted 6y ago[deleted]
- jl2718 6y agoYet another loan originator for Genesis counterparties, now with half the interest payouts. What are the capitalization and/or insurance requirements? This is all extremely opaque. The main reason they’d borrow is to short it, which means they’ll sell it to cause a liquidity crash. If that doesn’t work, they’ll be bankrupt and you’ll lose everything anyway.