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Earning 8% interest off assets that are already speculative with counterparty risk. What could make more sense?
by ketamine__ 6y ago
Earning 8% interest off assets that are already speculative with counterparty risk. What could make more sense?
- cliftonk 6y agoThese protocols typically have various strong incentives to prevent drops below a certain collaterization ratio. There is a real danger that ETH/USD moves too quickly while gas fees get too high for the system to function properly and we see a lot of defi losses. I don't think this is likely but it could happen.
- latchkey 6y agoOnly if you're just playing on ETH. There are other chains now that don't suffer from that issue.
- babyshake 6y agoA couple weeks ago there was a time period where there were tons of liquidations and gas fees were skyrocketing.
- ketamine__ 6y agoThe counterparty risk in also in the contract itself. Remember the DAO hack?
- latchkey 6y ago8%? What are you referring to? The recent BlockFi FUD (or not, depending how how you look at it) news? What I'm referring to isn't the same at all. BlockFi is CeFi. DeFi is a whole different ball game, which is a big reason why these DAO's exist.
- babyshake 6y agoI saw that BlockFi raised money. What is the FUD?
- ac29 6y agohttps://ditchblockfi.com/ https://ditchblockfi.com/
- ketamine__ 6y agoIt was a general example of an interest rate. I don't know what you are talking about.
- latchkey 6y agoOk... cause the 8% is approx what BF is known for. DeFi is much, much, much higher than 8%... 8% is often _daily_.
- ketamine__ 6y agoNot the point. The returns are in the 30-1000x from the initial investment.