[ 3 / biz / cgl / ck / diy / fa / ic / jp / lit / sci / vr / vt ] [ index / top / reports ] [ become a patron ] [ status ]
2023-11: Warosu is now out of extended maintenance.

/biz/ - Business & Finance

View post   
File: 2.45 MB, 4032x3024, 572DAF82-196E-4622-BE58-5CD1DE470203.jpg [View same] [iqdb] [saucenao] [google]
26051503 No.26051503 [Reply] [Original]

WHEN I LEND IN COMPOUND WHERE THE FUCK DOES THE INTEREST COME FROM??????

>> No.26051619

nice quahogs

>> No.26051734

mussels>clams
faggot

>> No.26051862

why are you not digging clams biz? do you hate money?

>> No.26051887

>>26051862
I only invest in deenz

>> No.26051972

>>26051862
I harvest clams every day anon. I eat 5kg of clams a day unironically. I use up all that protein for lifting and trading

>> No.26052203

>>26051503
ponzi scheming

>> No.26052433

>>26051503
it comes from the people borrowing your money, why are they borrowing your money? to gain leveraged exposure to cryptoassets or to provide liquidity to protocols with higher yield than their APR, why do they want leveraged exposure to crypoassets, well there are a few reasons: fiat hedge, speculation on the value of governance tokens, speculation on the value of utility tokens, and actual demand for usage of the above two types of tokens

>> No.26052482

>>26052433
Where and how are they borrowing it from? Sorry i just don’t understand it past the borrowing part

>> No.26052611

>>26052482
Compound you complete brainlet

>> No.26052661

>>26051972
>I eat 5kg of clams a day
Shit your loads must be huge

>> No.26052792
File: 1.90 MB, 480x270, 1581472025900.gif [View same] [iqdb] [saucenao] [google]
26052792

>>26052482
when you deposit funds into compound or another money market, those funds are collected in a giant reserve that others can borrow from, but only if they have collateral that has greater value than what they borrow (usually denominated in the deposited asset, but optionally denominated in fiat, since all these money market protocols have fiat price oracles, compounds is centralized and attackable with liquidity attacks, but that's beside the point), the collateral must have more value than what is borrowed so that the loan is guaranteed to be paid back, which can happen in 2 cases: 1) the borrower pays back the loan at their leisure on no fixed schedule, this is possible as long as the value of their deposited collateral doesn't fall underneath a predefined value (unique to each collateral and depends on how much you borrow) 2) their position becomes undercollateralized (their collateral has declined in market value to a sufficiently low point) and they become "liquidated", their collateral is sold for units of the debt (for example if you deposit ETH and borrow USDC, then your ETH collateral will be sold for USDC at a discount to "liquidators" willing buyers of your collateral), to pay the debt and restore the reserve pool to its original state

in short, interest payments are automatically generated if there are borrowers from the pool that you deposited into, thats how money markets work: people borrow shit, and they pay interest on what they borrowed, interest rates are higher for assets that are more in demand to be borrowed "the price of money goes up as the demand for money goes up, and vice versa" just like any market

>> No.26053031

>>26052792
> but only if they have collateral that has greater value than what they borrow

I dont get this anon. Why would anyone borrow if they already have assets of greater value?

>> No.26053258
File: 34 KB, 434x341, 1566269915085.png [View same] [iqdb] [saucenao] [google]
26053258

>>26053031
>be me
>have LINK
>want more LINK
>don't have any more fiat
>deposit LINK into Aave
>borrow USDC
>buy more LINK on preferred exchange with USDC
>LINKUSD goes up a lot
>haha yay
>sell some LINKUSDC to pay back USDC loan
>keep leftover LINK
>i now have more LINK than i started with
this is called "longing" fren, i didn't lose the LINK i started with, i had to temporarily deposit it and borrow USDC "against" it, that is what is known as a "collateralized loan" if they borrower doesn't pay back the loan then their collateral gets "liquidated" to cover the face value (or as much as possible of the face value) of the loan, collateralized lending is one of the most beautifully applicable usecases of smart contracts, the next being derivatives, parametric insurance, gambling, and so on

>> No.26053333

>>26053258
Fuck. Whoever designed this system must be a literal genius

>> No.26053394

>>26053031
>>26053258
>Why would anyone borrow if they already have assets of greater value?
because these loans have to be "overcollateralized" so that the amount borrowed from the protocol can always be covered by liquidations, if the loans weren't overcollateralized then it's possible that a volatile market could cause the collateral against which certain loans are borrowed to become less valuable than the face value of the loan, meaning if the borrower can't pay back the loan, the lender cannot be made whole through the sale of the borrowers collateral (liquidation)

>> No.26053434
File: 667 KB, 956x1656, 1556271358990.jpg [View same] [iqdb] [saucenao] [google]
26053434

>>26053333
stani are pretty smart but they didn't make up a new idea of scratch, they just implemented old ideas on a new technology which encourages seamless and utter COMPLIANCE!

>> No.26053468
File: 143 KB, 940x940, 1543443755608.jpg [View same] [iqdb] [saucenao] [google]
26053468

>>26053333
>>26053434
stani and rob

>> No.26054418

>>26053434
Your digits say you're important. Are you?

>> No.26054471

>>26051972
>5kg clams/day
how the fuck?
are you a professional clam catcher?

>> No.26054577
File: 3.44 MB, 1109x1141, 1549933878117.gif [View same] [iqdb] [saucenao] [google]
26054577

>>26054418
i like to think i have perspective, could just be schizophrenia though

>> No.26054994
File: 276 KB, 1280x960, 1540261102067.jpg [View same] [iqdb] [saucenao] [google]
26054994

>> No.26055032
File: 790 KB, 2448x1836, 1540337169717.jpg [View same] [iqdb] [saucenao] [google]
26055032

>> No.26055057
File: 1.29 MB, 1306x818, 1542432742876.png [View same] [iqdb] [saucenao] [google]
26055057

>> No.26055106

>>26052482
Sometimes I want to take a margin position on kraken but they will send me a cancellation saying insufficient margin. sometimes that's because my position side was too big but other times they ran out of collateral in their margin pool. They can fix that by taking out loans from defi. I try to get gains, they try to blow me out, and the person receiving the interest wins at low risk.

>> No.26055111
File: 1.38 MB, 1503x1046, 1561169548803.png [View same] [iqdb] [saucenao] [google]
26055111

>> No.26055592
File: 992 KB, 2793x2793, AF881593-3136-49CF-AA04-5CE8D55BBACF.jpg [View same] [iqdb] [saucenao] [google]
26055592

>>26055111
Dubs and trips checked.
How can the 4IR improve quality of life for man? Or is it too far along and set in stone?
It seems destined to manifest as impact bonds and a new form of modern slavery.

>> No.26055781

>>26055592
UBI will be feasible, but you will only be eligible if enter into a death agreement, the word "mortgage" will be repurposed for this new type of smart contract: if it can be proven that you have sired more than 2 children AND you receive UBI then you and your kin will receive the death penalty until there are only two progeny left, termination starts with you, then your concubines, then your youngest

>> No.26055798
File: 196 KB, 1690x1340, 1573349031530.jpg [View same] [iqdb] [saucenao] [google]
26055798

>> No.26055829
File: 1.66 MB, 638x662, 1610755959635.webm [View same] [iqdb] [saucenao] [google]
26055829

>>26052203
this

>> No.26056006

>>26055781
>termination starts with you, then your concubines, then your youngest
Obviously this is all handled automatically through contracts. A small portion of your UBI is held back as collateral to pay for hitmen if needed. You can redeem the collateral by installing a cyanide module.