https://blockfi.com/rates/ https://celsius.network/rates/ Several websites offer close to 10% interest on USDC. USDC is a stablecoin with it's value pegged 1:1 to USD (https://coinmarketcap.com/currencies/usd-coin/). Does 10% guaranteed return sound too good to be true? Some risks: - the exchange lose your USDC (fraud/hack) -- blockfi is supposedly insured (Gemini related) - USDC collapses and it becomes worthless
Basically you are loaning your crypto to the exchange. You can request your crypto back anytime, not sure is you can trade realtime though. OP, your risks are true even if you hold your crypto.
I'm comparing the risk to holding USD in FDIC-insured savings accounts. Would be stupid to hold USDC if you are not earning interests from it lol.
Are you sure it's a guaranteed 10% APY? There are so many defi platforms like aave that can also do this but AFAIK they don't provide fixed APY
Guaranteed until it isnt, at which point you can liquidate and cash out.
It's possible they make bad loans and lose the USDC you have deposited
They supposedly collect huge collateral, like 200% of the loan value in BTC. So basically a margin loan like from traditional brokers.
This is not fixed and would vary with average value over time
Interest pay out is weekly/monthly, you can liquidate anytime if the interest drops.
Lol tether also claimed they were 100% backed. Then it turned out they weren't and are banned from NY.
Celsius is insured. Blockfi isn't.
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This sounds like a pump and dump ad.
Pump what exactly? Do you know what is a stablecoin?