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> Because my main strategy for DeFI has been to (a) provide liquidity in Uniswap pools with tokens paired against USDC and (b) liquidity on Curve, where you sta

by xur17 5y ago

> Because my main strategy for DeFI has been to (a) provide liquidity in Uniswap pools with tokens paired against USDC and (b) liquidity on Curve, where you stake USDC and DAI. It's worth pointing out that most pools with USDC on curve also expose you to USDT.

rglullis 5y ago
Not the one from Compound. It is cDAI + cUSDC only. But to be completely honest, I am not on this anymore. I moved to the EURS/sEURS based one, as the CRV incentives are very good at the moment. Seeing how I was wrong about Circle status regarding audits, I need to do some more checks about the bank behind EURS.
- akrymski 5y ago
  There's no free lunch. Returns on lending stablecoins are ~ 2X higher than a 5-year treasury bond atm because the risk is 2X higher that Circle/Tether will default vs the US-government over the next 5 years. Stablecoin returns aren't a miracle - you are effectively lending money to these organisations and taking on associated credit risk. For example there are many small banks around the world that will pay > 3% APR on USD deposits [1] https://nomadcapitalist.com/finance/highest-interest-rates-banks/ https://nomadcapitalist.com/finance/highest-interest-rates-b...
  - xur17 5y ago
    I'm not sure if I'm looking in the right place, but this [0] shows 5-year treasury bonds at 1.25% right now. You can get anywhere from 9% (blockfi, gemini, etc) up to 20 or 30% depending on where you look - much more than 2x. [0] https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield https://www.treasury.gov/resource-center/data-chart-center/i...
    - akrymski 5y ago
      Looking at Compound since it's DeFi [1] the rate is 2.6% CeFi platforms like Celsius or BlockFi can offer more, but they are just as risky as any unregulated sub-prime lender in a third-world country (eg micro-lending institutions can offer those sorts of yields too). The reason DeFi loans are much lower yield than CeFi loans is precisely because the risk is on-chain in the former case, so deposits can't be stolen. Not sure where you see 20-30% on USD? Those rates are an indication of a rug-pull scam or a ponzi imho. [1] https://compound.finance/markets/USDC https://compound.finance/markets/USDC

by xur17 5y ago

rglullis 5y ago

Not the one from Compound. It is cDAI + cUSDC only. But to be completely honest, I am not on this anymore. I moved to the EURS/sEURS based one, as the CRV incentives are very good at the moment. Seeing how I was wrong about Circle status regarding audits, I need to do some more checks about the bank behind EURS.

akrymski 5y ago
There's no free lunch. Returns on lending stablecoins are ~ 2X higher than a 5-year treasury bond atm because the risk is 2X higher that Circle/Tether will default vs the US-government over the next 5 years. Stablecoin returns aren't a miracle - you are effectively lending money to these organisations and taking on associated credit risk. For example there are many small banks around the world that will pay > 3% APR on USD deposits [1] https://nomadcapitalist.com/finance/highest-interest-rates-banks/ https://nomadcapitalist.com/finance/highest-interest-rates-b...
- xur17 5y ago
  I'm not sure if I'm looking in the right place, but this [0] shows 5-year treasury bonds at 1.25% right now. You can get anywhere from 9% (blockfi, gemini, etc) up to 20 or 30% depending on where you look - much more than 2x. [0] https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield https://www.treasury.gov/resource-center/data-chart-center/i...
  - akrymski 5y ago
    Looking at Compound since it's DeFi [1] the rate is 2.6% CeFi platforms like Celsius or BlockFi can offer more, but they are just as risky as any unregulated sub-prime lender in a third-world country (eg micro-lending institutions can offer those sorts of yields too). The reason DeFi loans are much lower yield than CeFi loans is precisely because the risk is on-chain in the former case, so deposits can't be stolen. Not sure where you see 20-30% on USD? Those rates are an indication of a rug-pull scam or a ponzi imho. [1] https://compound.finance/markets/USDC https://compound.finance/markets/USDC