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As in they lose money on every loan but make it up in volume? The irony here is that’s supposed to be a joke and not an actual business plan.
by UncleEntity 4y ago
As in they lose money on every loan but make it up in volume?
The irony here is that’s supposed to be a joke and not an actual business plan.
- charcircuit 4y agoI think you missed a key detail. The collateral for taking out a loan earns staking rewards that get distributed to the depositors. The amount of money staking rewards are worth can fluctuate too depending on the state of the project / cryptocurrency ecosystem.
- Tenoke 4y agoA lot of businesses operate at a loss for the sake of growth early on, including a lot of the unicorns from the last decade or more.
- SAI_Peregrinus 4y agoYes, but most of them have a business plan that doesn't involve taking a loss, once they've reached a certain scale. And while they're taking that "loss" it's not usually due to revenues being below the cost of goods sold, it's because they're spending all profits + some investor money to grow. Many (though not all) can simply stop growing and be instantly profitable. Businesses that sell you $10 for $5 tend to fail as soon as they run out of capital, because they've got no path to profitability.