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They likely re-lend on crypto platforms where thanks to incentives and high borrow demand you can relatively easily get 15+% yields For example anchor protocol
by shawabawa3 5y ago
They likely re-lend on crypto platforms where thanks to incentives and high borrow demand you can relatively easily get 15+% yields
For example anchor protocol offers 20% APY on UST deposited in it, and has done consistently for 6+months. As long as the peg holds and the protocol is solvent it's "free" money
- heyitsguay 5y agoDoesn't that just push the same question back a level? Where are these other platforms getting their profits from to sustain such high yields? If there's high demand for high-interest crypto loans, that means there should be platforms one can point to to trace the source of profit - the high-interest loans that fund the high-yield deposit platforms that fund this medium-yield deposit platform? The whole thing sounds incredibly scammy.
- nazgulnarsil 5y agonot if more tether can be printed from thin air to pay the interest.
- xur17 5y agoFwiw, UST != USDT.
- vineyardmike 5y agoFYI. Anchor is almost out of money to pay that yield. https://au.finance.yahoo.com/news/anchor-protocol-reserves-slide-money-132554340.html https://au.finance.yahoo.com/news/anchor-protocol-reserves-s...
- shawabawa3 5y agoThey topped that up with another $450M https://agora.terra.money/t/capitalising-anchors-reserve-with-450m/4236 https://agora.terra.money/t/capitalising-anchors-reserve-wit...