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Pretty straightforward: You can currently get 8.88% APY return on lending stablecoins on Celsius[0]. It's also much easier to borrow and use in incredibly risk

Pretty straightforward: You can currently get 8.88% APY return on lending stablecoins on Celsius[0]. It's also much easier to borrow and use in incredibly risky contracts, yield farming, etc Stablecoins let you engage in much more risk than USD without the volatility of crypto prices. [0]https://celsius.network/earn-rewards-on-your-crypto https://celsius.network/earn-rewards-on-your-crypto

ceejayoz 5y ago
If a bank offered me 8.88% APY for depositing USD, I'd be pretty suspicious of a catch.
- backprop1993 5y ago
  There is a catch, but you won't find out what it was until they loose all of the money they are holding. There is probably a 50/50% chance this is just a Ponzi, and if it isn't it is some complicated strategy which can not handle black or even grey swan events, and there is a 5% chance there is a bug in their code that allows for all the funds to be stolen. But in the mean time you can get an 8% return.
  - lupire 5y ago
    "50/50" is pure speculation.
- godot 5y ago
  Well, there's no FDIC, so there's no government making sure you get your money back if the organization holding your money shut down. There's a number of companies offering something similar, like Celsius and Blockfi and a few others. Do your own research, and no need to go near it if not comfortable with it. Things could go either way from here on out, perhaps crypto is the future and 8.88% interest for stablecoins will be the standard; or perhaps it'll all come crashing down and all cryptos go poof in a few years. Who knows? Point being, when a new paradigm comes along, it usually seems strange and uncomfortable enough to feel suspicious. Maybe it's legit, maybe not, there's a chance for either case.
  - lupire 5y ago
    The exact number "8.88%" kind of screams "scam targetted at Chinese culture".
    - godot 5y ago
      That number varies, it's a weekly rate. I've been with Celsius for a while now and I know USDC interest rates used to be 10+% not too long ago (a couple months maybe?). Also, that's just their US rate for USDC and a few other assets. BTC interest rate is 6.2% right now. Internationally, the USDC interest rate is 11.21% with rewards in CEL. Celsius is a British company and is also HQ'd in the US now.
rlucas 5y ago
Just ask yourself, what productive use of USD reliably yields 8.88% plus a spread for the intermediary? (For regulated boring banks, net interest margin historically is around 3%.) Banks doing C&I lending to modest risk (but still not "rated bond issuer") companies are charging mid-single-digit rates. Those banks are generally paying depositors way under 1%. There do exist loan portfolios legitimately producing these kind of yields, but they are not trivial to produce. Actively managed and monitored specialized portfolios -- where you would really want to diligence the track record and underwriting/origination methodology of the lender. Don't get me wrong: dislocations do happen and arbitrages do open up, sometimes for far longer than you might think. But fundamentally, if this is non-Ponzi finance, someone must be using those funds for a productive enterprise that yields enough to cover the cost of capital. What is that in stablecoin lending?? (Source: I am an investor and former operator in specialty lending company, having sourced/raised capital in > 100 debt and equity deals.)
IncRnd 5y ago
That link currently shows 17% APY. I hope you don't believe everything you read.

ceejayoz 5y ago

If a bank offered me 8.88% APY for depositing USD, I'd be pretty suspicious of a catch.

backprop1993 5y ago
There is a catch, but you won't find out what it was until they loose all of the money they are holding. There is probably a 50/50% chance this is just a Ponzi, and if it isn't it is some complicated strategy which can not handle black or even grey swan events, and there is a 5% chance there is a bug in their code that allows for all the funds to be stolen. But in the mean time you can get an 8% return.
- lupire 5y ago
  "50/50" is pure speculation.
godot 5y ago
Well, there's no FDIC, so there's no government making sure you get your money back if the organization holding your money shut down. There's a number of companies offering something similar, like Celsius and Blockfi and a few others. Do your own research, and no need to go near it if not comfortable with it. Things could go either way from here on out, perhaps crypto is the future and 8.88% interest for stablecoins will be the standard; or perhaps it'll all come crashing down and all cryptos go poof in a few years. Who knows? Point being, when a new paradigm comes along, it usually seems strange and uncomfortable enough to feel suspicious. Maybe it's legit, maybe not, there's a chance for either case.
- lupire 5y ago
  The exact number "8.88%" kind of screams "scam targetted at Chinese culture".
  - godot 5y ago
    That number varies, it's a weekly rate. I've been with Celsius for a while now and I know USDC interest rates used to be 10+% not too long ago (a couple months maybe?). Also, that's just their US rate for USDC and a few other assets. BTC interest rate is 6.2% right now. Internationally, the USDC interest rate is 11.21% with rewards in CEL. Celsius is a British company and is also HQ'd in the US now.

rlucas 5y ago

Just ask yourself, what productive use of USD reliably yields 8.88% plus a spread for the intermediary? (For regulated boring banks, net interest margin historically is around 3%.) Banks doing C&I lending to modest risk (but still not "rated bond issuer") companies are charging mid-single-digit rates. Those banks are generally paying depositors way under 1%. There do exist loan portfolios legitimately producing these kind of yields, but they are not trivial to produce. Actively managed and monitored specialized portfolios -- where you would really want to diligence the track record and underwriting/origination methodology of the lender. Don't get me wrong: dislocations do happen and arbitrages do open up, sometimes for far longer than you might think. But fundamentally, if this is non-Ponzi finance, someone must be using those funds for a productive enterprise that yields enough to cover the cost of capital. What is that in stablecoin lending?? (Source: I am an investor and former operator in specialty lending company, having sourced/raised capital in > 100 debt and equity deals.)

IncRnd 5y ago

That link currently shows 17% APY. I hope you don't believe everything you read.