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> 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 w
by dmihal 5y 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 5y 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 5y agoIt is super anomalous financial behavior to seek out the highest cost funding though.