Nostr Web Client

2140btc 8mo ago

Why are interest rates on Bitcoin backed loans so freaking high?

They have your 🌽 which is trivial to take in a default, so why 14%+ interest rates?

Can anyone in the know weigh-in on this? nostr:npub1w69ya7xs697hk3hky3gllryz8rwverfa0ylz89chf9qnhfcskc2s64zltw nostr:nprofile1qqsywt6ypu57lxtwj2scdwxnyrl3sry9typcstje65x7rw9a2e5nq8spz3mhxue69uhkummnw3ezummcw3ezuer9wcq32amnwvaz7tm9v3jkutnwdaehgu3wd3skueqq5fsxl nostr:nprofile1qqsqfjg4mth7uwp307nng3z2em3ep2pxnljczzezg8j7dhf58ha7ejgpr9mhxue69uhhxetwv35hgtnwdaekvmrpwfjjucm0d5q3samnwvaz7tmswfjk66t4d5h8qunfd4skctnwv46qu7vtcc

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Discussion

it all comes down to liquidity partners

the source of the dollars for the loans sets the rates

they should go down over time, eventually they should be the lowest rate loans available because bitcoin is the best collateral

strike has no prepayment penalty or origination fee so as rates go down, users benefit

Market participants are low. Still tiny market. Will come down over time.

Base Layer Capital 8mo ago

Best explanation I have heard. Guessing we are still 5 years out from favorable loan terms.

2140btc 8mo ago

Thanks for the response nostr:nprofile1qqsqfjg4mth7uwp307nng3z2em3ep2pxnljczzezg8j7dhf58ha7ejgpr9mhxue69uhhxetwv35hgtnwdaekvmrpwfjjucm0d5q3vamnwvaz7tmjv4kxz7fwwpexjmtpdshxuet5mm8xr7. I was taken back at the rates from Unchained and am failing to understand the why. Hoping the next five years brings sanity to this area in Bitcoin.

That’s great information on Strike. I’ll pass that along.