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After watching a few interviews with BlockFi[0], I come to understand: There are probably hedge funds or other large institutions who want to trade USDC or BTC

After watching a few interviews with BlockFi[0], I come to understand: There are probably hedge funds or other large institutions who want to trade USDC or BTC without owning it. I am not a professional investor, so I don't understand quite why they wouldn't just buy USDC or Bitcoin outright and trade it... But, every market needs liquidity and you basically are providing it by lending out your assets. There are some protocols emerging which lets you keep ownership of your coins and still lending them out. I would go to BlockFi or other 2-3 bigger institutions (maybe even Kraken or Coinbase) and lend USDC out for currently 10%. I don't know about taxes much, it depends on the country. All crypto is tax free in Germany after 1 year, so people mostly hold for a year and sell. I am lending out USDC because, well, where do I get 10%? Also, lending out BTC means you can still keeping it while profiting from it. Few people here understand that people actually don't want to sell Bitcoin since it seems to be a hard asset, and you don't want to get rid of it. So you can profit from the gains on the BTC price WHILE ALSO profiting around 5% a year of it. It's like a dream. I don't expect this to go on for ever, but the market needs liqudity and its a perfect time to do so. [0] https://www.realvision.com/shows/the-interview-crypto/videos/blockfi-earning-with-your-crypto https://www.realvision.com/shows/the-interview-crypto/videos...

homakov 6y ago
>There are some protocols emerging which lets you keep ownership of your coins and still lending them out. how is it possible? When you lend your assets, someone can give it to other person. You cannot keep ownership of something others control?
- rawtxapp 6y ago
  I believe he might be referring to flash loans, essentially the borrowed money is returned to you within the same transaction that borrowed it + interest.
  - homakov 6y ago
    I don't agree with calling flash loans loans. Money isn't borrowed, as you don't posses them even for a second. Instead it's more like "offer me an atomic transaction that will make me money, and I will run it with my liquidity". See: i'm not giving you my liquidity, i merely choose to use your strategy which is atomic, and you cannot change your mind and steal the money halfway (as in borrowing).
- scottmsul 6y ago
  Overcollaterization and multi-sig. For example on HodlHodl you can lend USDC where the borrow posts more collateral than the loan. The lender, borrower, and HodlHodl each own one key in a 2-of-3 multi-sig. If there's a dispute then HodlHodl will resolve it.
ac29 6y ago
> I am lending out USDC because, well, where do I get 10%? The US stock market has returned more than that on an annualized basis over the past decade. (yes, I realize past performance isnt future returns in stock markets, but returns are hardly riskless in crypto either)
- foreach32 6y ago
  Fixed income is different than stocks. 10% no matter what is sometimes what you want instead of: Maybe 15% or maybe -10% a year.

homakov 6y ago

>There are some protocols emerging which lets you keep ownership of your coins and still lending them out. how is it possible? When you lend your assets, someone can give it to other person. You cannot keep ownership of something others control?

rawtxapp 6y ago
I believe he might be referring to flash loans, essentially the borrowed money is returned to you within the same transaction that borrowed it + interest.
- homakov 6y ago
  I don't agree with calling flash loans loans. Money isn't borrowed, as you don't posses them even for a second. Instead it's more like "offer me an atomic transaction that will make me money, and I will run it with my liquidity". See: i'm not giving you my liquidity, i merely choose to use your strategy which is atomic, and you cannot change your mind and steal the money halfway (as in borrowing).
scottmsul 6y ago
Overcollaterization and multi-sig. For example on HodlHodl you can lend USDC where the borrow posts more collateral than the loan. The lender, borrower, and HodlHodl each own one key in a 2-of-3 multi-sig. If there's a dispute then HodlHodl will resolve it.

ac29 6y ago

> I am lending out USDC because, well, where do I get 10%? The US stock market has returned more than that on an annualized basis over the past decade. (yes, I realize past performance isnt future returns in stock markets, but returns are hardly riskless in crypto either)

foreach32 6y ago
Fixed income is different than stocks. 10% no matter what is sometimes what you want instead of: Maybe 15% or maybe -10% a year.