How does Crypto Lending work?

Google
Moonboy_

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Moonboy_
Jan 3, 2021 15 Comments

It seems that you can lend your money for 9%-14% per year consistently, meanwhile you can borrow money for only 1-5% per year.

Couldn't you just take out a loan, lend it, and make infinite money?

None of this makes any sense...

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TOP 15 Comments
  • Google
    . .

    Go to company page Google

    . .
    Probably because you getting your money back at the 9-14% is lower than the banks risk of getting it from you at 1-5%
    Jan 3, 2021 4
    • Google
      Moonboy_

      Go to company page Google

      Moonboy_
      OP
      Okay, so in other words, I'm correct in thinking that these are most likely not real? (i.e. they are ponzi schemes?)
      Jan 3, 2021
    • Google
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      Go to company page Google

      . .
      Not necessarily. But you are taking a risk in any investment you make. The banks taking a less risky investment with you, hence the lower rates.

      The banks would lend to these companies directly if they thought it was a sure thing.
      Jan 3, 2021
  • New / Ops
    poktrm

    New Ops

    poktrm
    When you lend you have to provide collateral that is typically much more than 1:1. That and if the price fluctuates too much you could get liquidated.
    Jan 3, 2021 8
    • Google
      Moonboy_

      Go to company page Google

      Moonboy_
      OP
      Okay I see. What are your crypto lending plays at the moment, if you don't mind sharing?
      Jan 3, 2021
    • New / Ops
      poktrm

      New Ops

      poktrm
      Whoops posted to the wrong thread.

      I don't lend my crypto out to third parties. I'm considering lending dai on compound with the decentralized insurance they offer, but its a big jump. Also considering using something like pooltogether for decentralized no-loss lotto. Other than that I have positions in maker, aave, band, link, tellor, and snx.
      Jan 3, 2021
  • This comment was deleted by original commenter.

    • New / Design
      ⚡️🤝⚡️

      New Design

      BIO
      Zen Out 🐐
      ⚡️🤝⚡️
      Wait nvm interest is evil
      Jan 3, 2021