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Earning 10% "riskfree" isn't speculation, it's a Ponzi. What serious borrower needs to pay 10% to access credit? So then, who are the borrowers who are paying t
by dash2 6y ago
Earning 10% "riskfree" isn't speculation, it's a Ponzi. What serious borrower needs to pay 10% to access credit? So then, who are the borrowers who are paying this interest? As they say on Reddit: !remindme 1 year.
- mratsim 6y agoArbitragers gladly pay 10% of their risk-free income to lenders to execute an arbitrage opportunity.
- dmihal 6y ago> What serious borrower needs to pay 10% to access credit? People who can make more than 10% trading? Lending protocols aren't doing anything different than what banks do: allocating inactive capital to those who can make use of that capital and are willing to pay for it. Interest rates are high because of A: market volatility, professional traders can easily make more than 10%, and B: information asymmetry, large capital pools haven't allocated to these pools.
- dash2 6y agoIf you can reliably make more than 10% trading, you can borrow from a bank. Or Goldman Sachs. Or whoever. The current interest rate is practically 0. Anyone who is borrowing at 10% is either (a) not very bright or (b) more likely, doing something risky with their money that reputable moneymakers won't touch... probably involving the blockchain. So yeah, Ponzi.
- MrMan 6y agoIt is super anomalous financial behavior to seek out the highest cost funding though.
- terrortrain 6y agoIt's not a ponzi. Lookup what a ponzi scheme is.