2 ms·

>> Staking is not a loan. >Yes it is. Sort of? The risk profile is significantly different.

• dragontamer 4y ago
  Real life bonds range from Savings accounts (which are tied to the overnight Fed rate, with an assumed repayment within days or one week at the worst), to "Junk" bonds to companies and/or governments that are currently going through default and/or bankruptcy (See Greek bonds between 2009 and 2017) At the lowest risk end, we have the "risk-free rate", guaranteed by the central bank. At the higher risk end, we have highly risky loans (ex: Greek Bonds in 2014 or so). Or mortgaged backed securities. Or student loans. Etc. etc. -------- Bonds / loans are a very old economic subject that have been around for hundreds of years (maybe thousands?). There's a myriad of historical subjects and writings on this subject. In general, the more trustworthy the issuer and the shorter the maturity, the safer the loan is. An overnight loan with the Fed (aka: Central bank of the United States) will be lower risk than a 30-year subprime mortgage. The economics will demand that the longer-loan will (usually) be priced higher (except in times of inverted yield curves, where people think there's more near-term risk than long-term risks). Etc. etc. Its a big complex subject. But its all about loans and bonds, and money and IOUs and promises and trust.