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/biz/ - Business & Finance

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49929020 No.49929020 [Reply] [Original]

I’m aware of the liquidity issues & the shitstorm w celsius, NEXO, bancor, etc, but I thought DEXs were supposed to be immune to this type of thing? If one wanted to get a crypto loan in the future, would say AAVE or Uniswap be a relatively safe alternative to the above listed options? And if so, what sets those two apart from bancor? Aren’t they both DEXs

>> No.49930493

>>49929020
There isn't risk free return. In the bond market higher rates of yield indicate higher risk.

>> No.49930598

>>49929020
no. the whole point of crypto is to eliminate the money printing disease and have verifiable scarcity. in other words it's not possible to pay off interest without diluting supply by minting more tokens. if you see someone do this avoid that project like a plague. l1 staking/mining is the only reliable way to earn passive income with crypto.

>> No.49930729

>>49930493
>>49930598
Im not talking about staking for X% apy, this time last year a lot of /biz/ was touting crypto loans as a great alternative to cashing out to dodge capital gains tax & also to keep hold of your stack. Come to think of it that could’ve just been defi services shilling on here though.

>> No.49930826

>>49930729
Oh sweet summer child.
In order for you to have a loan, someone has to risk their crypto to loan it to you through the platform. The incentive to do that is offering staking X% APR
Why don't you just get a loan through Coinbase for cash? They lend up 30% LTV. Of course, the risk is you get margin called if the value of your collateral drops and pushes your LTV up over the limit.

>> No.49931043

>>49930826
I see, I didn’t know Coinbase offered such a feature. Generally speaking though, DEFI services that offer lower APY (think below 1%) SHOULD generally be safer options, right? Honestly I think I’d trust AAVE w my coins before cuckbase. Not looking for a loan anytime soon btw, just curious.

>> No.49931263

>>49931043
why do you still fuck with centralized exchanges and platforms, Jeets never learn their lessons from Celsius

>> No.49931845

>>49931263
AAVE is centralized?

>> No.49932646

>>49929020
DEXs are immune from active management, aka gambling with user funds (exactly what all cefi platforms like nexo, celsius and blockfi do)
but they are not immune from an inherently shitty system or a ponzi-style structure

what happens when #1 defi app is offering 0.1% interst, but #10 defi app is offering 20% interest?
could it be that #1 app is taking advantage of you? that they got a shitty system (despite being preferred by the crypto community) and that #10 app figured it all out?
or could it be that the rewards are to entice new users and maintain through the entry of even more new users and that you are about to enter a ponzi scheme?

aave and uniswap are good calls
basically avoid anything that offers ridiculous APYs
ESPECIALLY if those APYs are maintained not through proper protocol usage and revenue generation, but through debatable tokenomics