3 ms·
it'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 lin
by Acrobatic_Road 6y ago
it'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?