How does a 9.3% savings account sound?

[jacoavlu]

jacoavlu
Changing the lockup period.
Glad they had phone support.
Not sure if that is still their policy.

The combination of those three in your explanation imply (to me) a fluid situation. The ability to change the “deal” itself is a risk. What if their policy changed the “phone support” was no longer available? I am just noodling a “run on the bank” situation.

I think you earned the $50k by monitoring the counterparty risk. Regardless of the rate.

This seems to me to be an alternative investment that takes skill and knowledge. Thus the risk justifies the higher returns. That implies that some will incur losses. Thanks for contributing you experiences.

I am actually not sure they changed the lockup period, likely they didn't. But at first ACH deposit limits were very low, so to move any sizeable dollars you had to wire it in. Then they raised ACH limits to like $25k per day making it much easier to avoid wires. And so it was that transition that got me. Not sure if a scammer could move funds by ACH, buy btc, 45 days later move the btc off the platform then somehow reverse the ACH transaction, but that was basically their argument for the policy. Which in a way should give some folks comfort in that they're being conservative in this one sense and trying to mitigate risk.

alternative investment, definitely.

[jacoavlu]

Yes.

Too good to be true.

You can have risk & high returns or safety, not both.

This time it is different?

Admittedly, I don’t understand it. So, even if it is true and “stable” i will wait on the sidelines and try to learn.

who said anything about safety?

and stablecoin is just a term for a digital token which is pegged to the value of another asset typically a fiat currency, in this case USD. don't conflate the fact that the word "stable" is part of the conversation to mean that someone is implying that there is no risk in participation across the whole stack.

[jacoavlu]

Thanks for the update. It is always interesting to me to see how the scenarios posted here actually play out.

Your challenge on my use of “market rate” seems fair. I probably meant something more like risk free rate, but maybe in this comparison conventional market rates. Regardless, I generally find rates of return to be proportional to the amount of risk accepted. That said, risks can be mitigated by knowledge and experience. In this case I am happy to learn from others.

people use the word "risk" as if it has some clear or universal definition. when in reality its usually undefined and has a different meaning for each participant in the conversation.

warren buffett says buying bonds now is more risky than buying stocks. as an example.

[Tim]

Gamble and stable coins don't quite belong in the same sentence. are 390-780%.

““Worst case you’re out the $100-1000 as a learning experience but then can also say “I told you so” to all the crypto people lol.””

Sorry, for the misinterpretation. The word gambling is usually associated with odds or percentages. What are the odds?
You need to quantify “worst case” for “I told you so.”
Over collateralized is also the value in “worst case”. Break this down into odds or percentages.
Just saying “I told you so” is not a ton of value. Are you saying that there is a zero chance for loss? On any account or in total? Risk free at 10%?
Let’s not get caught up in words.
It would be a gamble to me and I would be interested in liquidity risk being zero with a holding period.
The risk hasn’t been quantified.
The return of interest has.
risk/return is the question.

[Nysoz]

There aren't that many index funds though. They all basically track S&P 500, Nasdaq, or total market. Maybe you meant mutual funds or ETFs.

[Panscan]

How do you define most index funds , what is an example fund then? Which stock indices then ? Spy is basically the token index fund. You seem to be conflating safety with the value going up which are two totally different things. But in crypto world “ line go up” so no one cares about anything else.

The volatility is one of the core concepts of its safety/risk. The price can move a lot fast. That helps it go up fast and it also helps it go down fast.

[nycEMMD]

Underinvestment ? Had more than 50% of total investments in crypto at one point

"at one point", "more than 50%", lol, get those numbers up rookie

if you say spy is less safe or more volatile than Btc, a rational conversation cannot be had, full stop.

Lol, that's not what I said, very nice of you to put words in my mouth. I said "BTC and ETH have much lower risk than MOST index funds", you can go ahead and check, just scroll up a bit, I'll wait.

I didn't say anything about SPY, didn't say anything about volatility. The point is that in the long run, BTC and ETH will give you better returns that MOST index funds while also having a much lower risk of loss of capital than MOST index funds.

Now let's hear how you misinterpret this post.

Also, you're definitely still butthurt about my comment from a month ago, just admit it

[Random1]

I will admit I dont know alot about crypto which is part of the reason I pose some of these questions is to try to "figure" it out. Yes, even after all these degrees I don't have a good understanding, and that is part of the reason I have skepticism about this. For almost every thing in finance , it is a zero sum game , for someone to win , some one else has to lose, and I see this as no exception. For me at this stage in life, figuring out how not to lose is more important than winning.

[Panscan]

Underinvestment ? Had more than 50% of total investments in crypto at one point , doesn’t mean you can’t call out blatant lies/BS when you see them.

if you say spy is less safe or more volatile than Btc, a rational conversation cannot be had, full stop.

[nycEMMD]

they could sell their crypto and get out of scam world and use it for actually viable transactions.

you keep saying just because someone is not hopelessly in love with crypto or defi they don’t know anything about it and frankly it’s really annoying.

overcollateralized loans are another joke which just shows how volatile the underlying asset is. BRB let me put up 1k in collateral to have access to 500 dollars of funds , it’s the dumbest thing. Fools and their money soon parted

Awwwww, still salty from that post I made about your lack of knowledge and underinvestment in the crypto space a month ago? Did I strike a cord? Now you're replying to all my posts with some garbage answers. That's cute, keep it up buddy

[Panscan]

Again, someone with no knowledge about defi and stablecoins making assumptions and stating them as fact. The people taking out loans with 20%+ interest on defi have large crypto holdings and cannot use those holdings as collateral in the traditional financial system. As it was stated multiple times above, all these loans are over-collateralized so what you're describing is incorrect.

You have knowledge of the traditional financial system and are extrapolating it to the defi space without having any understanding of how the defi space works. Please do some reading

they could sell their crypto and get out of scam world and use it for actually viable transactions.

you keep saying just because someone is not hopelessly in love with crypto or defi they don’t know anything about it and frankly it’s really annoying.

overcollateralized loans are another joke which just shows how volatile the underlying asset is. BRB let me put up 1k in collateral to have access to 500 dollars of funds , it’s the dumbest thing. Fools and their money soon parted

[Megalops]

Alternatively, I think we need a stablecoin thread, I think someone suggested it in another post, maybe we should write one up. Maybe I'll do a deep dive on stablecoins and tie it into lending and defi

I think that would be great for those of us wanting to learn more. ( Although I in no way think these investments are less risky than index funds) Based on the responses to recent WCI articles and board thread I think it would spark some good debate.

[Panscan]

Just reading comments in this thread, yet again, a bunch of people that have no understanding of how stablecoins and defi work yet posting the same tired FUD we've been hearing from the nocoiners for the past few years



Not quite my friend. BTC and ETH have much lower risk than most index funds yet offer higher returns. If you don't understand why stablecoins offer such a high interest rate you need to do some more reading

Lol Btc and eth less risk than index funds, man that is so much hopium it hurts. Stablecoin have so much interest bc of the Ponzi schemes of crypto which are constantly imploding.

look at blockfi which has imploded and has consistently lowered the amount of interest they pay.

[Nysoz]

Gamble and stable coins don't quite belong in the same sentence. Yes it's riskier than a typical bank account but it's not putting it all on black/red. For that increased risk, you get 8-10% interest rather than the 0.01-0.3% interest from a typical institution. So don't put all your emergency fund in it, but if you're interested in learning about how it works, that's where the $100-1000 comes into play. Once you have money in the system, you're more interested and can see how it actually works rather than just read about it. If it does work, now you can take your wife out for more free dinners or in Jaco's instance a free Tesla.

I'll wait for someone else to comment about how stable coin lending actually works. But from what I understand, to take out a loan there's no credit score involved. You have to have collateral/assets already in place to cover the loan. So when there's a huge btc/eth correction/pullback there's a chance it's the speculators in the crypto space getting auto liquidated to ensure the people lending out the 'money' can be paid back.

Since there's no credit score involved, this is where the unbanked population can potentially be served. We look at 10% interest and think it's crazy because we all have great credit scores, have large emergency funds, have access to cheap money. Payday/predatory loans exist for a reason, because people need that money (and don't understand what they're signing up for) and don't have access to the resources we do. Annualized, those loans are 390-780%.

[nycEMMD]

Late to the thread, but stated above “ I think that most of cash deposits are lent out to individuals”. The only individual who would take a 10%+ loan now , is someone with poor credit risk. Otherwise , they could get a loan at a much lower rate. So your interest rate is dependent upon poor credit risk individuals with high interest loans paying back their debt on time or at all. When the economy slows down , these are the first to default.

Again, someone with no knowledge about defi and stablecoins making assumptions and stating them as fact. The people taking out loans with 20%+ interest on defi have large crypto holdings and cannot use those holdings as collateral in the traditional financial system. As it was stated multiple times above, all these loans are over-collateralized so what you're describing is incorrect.

You have knowledge of the traditional financial system and are extrapolating it to the defi space without having any understanding of how the defi space works. Please do some reading