What's the market for borrowers? What are people borrowing cryptocurrency for?<p>With fiat interest rates at record lows, why not borrow fiat instead and use it to buy crypto? Surely not all of the demand is coming from the unbanked?<p>EDIT: My question was answered while I was typing it up :)<p><a href="https://news.ycombinator.com/item?id=25996264" rel="nofollow">https://news.ycombinator.com/item?id=25996264</a>
Am I missing something about crypto lending? Your deposit can't be FDIC insured and if borrowers are defaulting that means your deposit disappears. You can't bailout a crypto bank by printing crypto.<p>The appreciation of Bitcoin has been so staggering that it also makes getting interest back on your deposits seem rather outdated.
Yet another loan originator for Genesis counterparties, now with half the interest payouts. What are the capitalization and/or insurance requirements? This is all extremely opaque. The main reason they’d borrow is to short it, which means they’ll sell it to cause a liquidity crash. If that doesn’t work, they’ll be bankrupt and you’ll lose everything anyway.
Can someone more familiar with these types of programs (whether Gemini's or another's) explain how these companies evaluate the trustworthiness of their borrowers?<p>Given that these loans appear to be unsecured, the <i>last</i> thing I would want is for Gemini to approve someone with my money and have them skip town, metaphorically speaking.
Literally still waiting on verification from Gemini after more than 2 months. I've since opened an account with BlockFi (was verified in 24hrs) an account with Binance (same again) and bought crypo from binance and moved it to blockfi for interest gain. Gemini can suck a fat one.
I may have missed this on the page; is the interest paid in USD or in the asset you're lending? The examples only show USD.<p>It says interest compounds daily; keep in mind (US Residents) that every day is another line item you need to report to the IRS.
PROGRAM RISKS<p><i>YOUR AVAILABLE DIGITAL ASSETS WILL LEAVE GEMINI'S CUSTODY, AND YOU ACCEPT THE RISK OF LOSS ASSOCIATED WITH LOAN TRANSACTIONS, UP TO AND INCLUDING TOTAL LOSS OF YOUR AVAILABLE DIGITAL ASSETS.
Gemini is not a depository institution, and the Program does not offer a depository account.
Participating in the Program may put your Digital Assets at risk.
Loans made through the Program are unsecured.
You have exposure to Borrower credit risk, and Borrowers are not required to post collateral to you or to Gemini.
Transactions in Digital Assets may carry added risk compared to lending of other types of assets because transactions in cryptocurrency are in many cases irreversible.
Funds may not be recoverable in the event of errors or fraudulent activity.</i>
Poor interest rates compared to other more established competitors like <a href="https://celsius.network/" rel="nofollow">https://celsius.network/</a>