Ok so if interest is not based off payment from loans, how is the interest money generated in this touted low-risk scheme?
Are they taking temporary losses to grow customer base? That’d point to interest rates cratering soon since that’s not sustainable. Or is it merely a Ponzi scheme with new money used to pay artificially inflated interest rates? Neither of these sound very reassuring on the safety of the investment.
It’s the interest on the principal of the loan plus the staking rewards on the collateral.
Interesting marketing blog, but you can eventually get to the risks if you’re willing to read and click. My comprehension is slightly dulled, as this is a night off for me, but it seems:
I didn’t go further, so there may be other risks.
Despite the negativity of the above, when I get a spare couple of hours to further investigate, I may try it next year. My 2021 fun money is currently burning up like a house on fire (the bad kind) as a hedge.
So that has the same risks as the crypto collateral + defaulting risks from P2P loans + usual risks associated with digital wallets. That seems to me quite a bit short of the low-risk guaranteed returns advertised.
It’s got plenty of risks, sure, but I was just pointing out where the 15% comes from since you guys were speculating incorrectly. I didn’t personally call it low-risk. Also, I wouldn’t consider the default risks similar to p2p lending since they require much more collateral.
What makes you say this?
Because my theory is that the entire point of borrowing stablecoin is to cash it out and spend it. Why else stake your fake money and pay interest?
But then you’d lose your collateral entirely. So unless you know/gamble that ETH is gonna lose more than the amount they overcollateralize it (they only loan you up to 60-70% of the value of your collateral), what’s the point? Why not straight out exchange your original cryptocurrency for USD? I actually don’t think planned defaulting is the main reason.
My main guess is borrowers are people who want to cash out their cryptocurrencies without paying tax. If you made millions in bitcoin or ETH, realizing these gains by selling could cost you a lot more than the 5% interest of these loans. Better than 15-20% long-term capital gains tax. Basically same thing as Musk or other who just offer stock as collateral and borrow against it rather than selling them to finance their lifestyles.
Umm, yes that is what people do with loans. They wouldn’t take out the loans unless they needed to, uh, spend the money. How does that factor into defaulting? These are collateralized loans with LTV of 25-75%. What is the point of defaulting on a $7,500 loan if you put up $10,000 worth of bitcoin to get it? I mean, if bitcoin drops 25%, then clearly I can see how it makes sense, but it can just as easily jump that much (and has been going up and down by that much regularly).
@Shandril s right. For the people that have been in the crypto market long enough and have those triple digit percentage gains, single digit interest rates that help them avoid taxes make perfect sense. Then there are the newcomers to the market betting that their gains will outpace their loan’s interest rate. For the most part, they’ve been right. Sure, depending on timing and some dips in the crypto market, some of them will default, but at avg 50% LTV on their collateral, how bad will that really be for the investors, when the collateral also makes 10-20% while being staked?
Well, I never said they’d default. I just said they don’t plan to pay it back - i.e., a forever loan. In a way it’s a continuously inflating bubble, as long as there’s stablecoin available to borrow.
Haha, okay. I totally misunderstood then. I’m good with a forever loan. I’ll take those forever returns.
I mean, mortgages are essentially forever loans and that aspect hasn’t come back to bite us (obviously other aspects have - I’m not denying 2007/8).
The metaverse is comin’ at us like a freight train.
And there is more:
“This acquisition is another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming and culture,” said Nike president John Donahoe. Nike last indicated it was getting into the metaverse in November, when it quietly filed over half a dozen of its signature trademarks with the US Patent and Trademark Office (USPTO) “for use online and in online virtual worlds.”
Natch:
All this sort of stuff is reliant on NFTs.
Well if some people are ready to pay for virtual shoes and clothes… why not. More power to Nike to milk them.
I’ll probably stick to their tangible goods though, thank you. 
Their tangible goods aren’t that great either
Crypto
A 2018 study found that only 4.5% of images in medical textbooks showcase dark skin tones.
Guys, these NFTs are only just getting started. The possibilities are “virtually” endless! 
Link to Bloomberg coverage . . . . money, money, money!
Next?
Your Hispanic fetus NFT, followed by:
Your quintessential oriental fetus NFT.
But those don’t even scratch the surface. Just think:
All of the animal kingdom fetus NFT possibilities!!
Like I said: endless!
Melania jumping head first into the NFT arena with this ground floor offering you can purchase. Own a small piece of Melania herself.
All proceeds of course go to charity, but I cannot WAIT to hear the wails protest and expressions of contempt from the left.
Melania Trump announces NFT in bid to help foster children
ETA
Prospective purchasers can find updated SOL to dollars conversion information here:
Definitely not true. “Former first lady Melania Trump announced a non-fungible token (NFT) initiative Wednesday, with part of the proceeds going to support children aging out of the foster care system.”
Even if I were remotely interested in NFTs, that’d be a hard pass for me, especially from a non-501(c) organization. I’d be very cautious with statements like this. The original quote states “a portion of the profits” which could mean anything down to just a few cents or dollars per sale.
So hopefully it’s not just a greedy money grab with minimal proceeds actually going to children in need. Not holding my breath though but still wouldn’t hold it against her for milking suckers.
Children aging out of the foster care system … or … six foot tall portraits of Trump hung in his golf course … tomato … tomatoe…
Well of course “haters gonna hate hate hate hate hate”.
So those remarks are anticipated.
I will go with this quote from PYMNTS.com:
Sales of Melania’s Vision will benefit her Be Best initiative, helping “foster children acquire computer science skills, including programming and software development, to thrive after they age out of the foster community.”
And if Melania devotes a tiny percentage of her profits to coverage of her costs, that is fine with me.
This particular foray into NFT sales by Melania is only the first of many to come. At least she has innovative and creative NFTs to sell. There would certainly be nothing in Dr. Jill’s NFT repertoire worthy of purchase, if she even had an NFT repertoire!
I was just pointing out that you were incorrect stating: “All proceeds of course go to charity…”
If she had announced it that way, I think it’d be much more reassuring that the funds would be used for the stated purpose. The truth it, we have no idea how much of the proceeds will go to help kids. Like you said, anything that comes out of it to help some foster care kids, will be better than nothing.
And like I said, I don’t have a problem with her selling NFTs. She’s not forcing anyone to buy them. Especially as an ex-model, she’s totally within her rights to make money out of her image. And taking advantage of the fad seems totally fair game.
Just like I would not get any NFTs (or anything else) from Dr. Jill Biden either although I’d consider it equally fine for her to monetize her image via this method.
